Inflation is proving to be a real problem now. This comes as new figures released this week suggests that food prices were up 15.7% last month compared to April 2022. The Bank of England is predicted to raise the interest rate again later this month. This makes everyone nervous which means if you have been building resilience in your business you will cope better.
Building Resilience in your organisation
Tough economic conditions can help you and your team to build resilience and learn how to weather future economic storms.
By persevering through tough times, you’ll develop the skills and experience needed to navigate similar challenges in the future.
As you will know, the UK has experienced several major recessions over the past few decades and there will be others in the future. That is just how economies go. We are now living in a global world and change happens regularly.
It is interesting to look at the last few economic downturns and their reasons. You will remember these if your business has been around for a while like ours. You’ll have stories to share on how you managed and how you steered your way through. We’d love to hear from you if you would like to share. But here are some of the main downturns:
- The Great Recession (2008-2009): The Great Recession was a global economic downturn that was triggered by the US subprime mortgage crisis. The UK economy contracted by 6.3% between the first quarter of 2008 and the second quarter of 2009, with significant job losses and a sharp decline in consumer and business confidence.
- The Dot-com Bubble (2001-2002): The dot-com bubble was a speculative bubble in the stock market, driven by the rapid rise of internet-related companies. The bubble burst in 2000, leading to a global economic downturn. In the UK, the economy contracted by 2.1% in 2001 and 0.3% in 2002.
- The ERM Crisis (1990-1991): The ERM (Exchange Rate Mechanism) crisis was a major economic downturn that was caused by the UK’s decision to join the ERM in 1990. The move led to a sharp rise in interest rates, which made it difficult for businesses to borrow money and led to a recession. The UK economy contracted by 2.0% in 1990 and 1.2% in 1991.
- The Oil Crisis (1979-1981): The oil crisis was caused by a sharp rise in oil prices, which led to a global economic downturn. In the UK, the crisis was compounded by high inflation and rising unemployment. The economy contracted by 2.2% in 1980 and 1.4% in 1981.
Whilst we are currently not in a recession it feels very uncertain out there.
We hear stories each day comparing the UK against other leading economies and how we are lagging.
Then there are the strikes with the medics, teachers, and train drivers which contributes to weakening the economy overall. It is important to remember to keep going when the conditions get tough. These three actions will go some way to bring stability for you and your team:
Maintain Customer Loyalty
When economic conditions are tough, many businesses may cut back on their offerings, reduce quality, or compromise on customer service.
By continuing to deliver high-quality products or services, you can build loyalty with your customers and position your business for long-term success.
It’s essential to keep your customers informed about any changes to your business operations or products/services. Be transparent about any challenges you’re facing and communicate how you’re addressing them. This will help build trust and loyalty with your customers.
Tough economic times can also present unique opportunities. For example, you may be able to acquire assets or intellectual property at a discount. Or you may be able to gain market share by taking advantage of competitors who are struggling.
While it’s important to focus on immediate challenges, don’t lose sight of your long-term goals. Look for opportunities to invest in your business’s future, whether that’s through research and development or marketing initiatives.
By keeping a long-term perspective, you can position your business for success in the future.
It’s important to keep going in tough economic times to maintain morale among your employees and stakeholders. By demonstrating your commitment to your business’s success, you can inspire others to do the same and build a culture of resilience and determination.
Your employees are your most valuable asset, and it’s important to support them during tough times. Consider ways to offer flexibility, such as remote work or flexible working.
Whilst you may be feeling overwhelmed and anxious at times just because of what is going on out there, chances are your team will also be feeling something similar. Things are hard right now for a lot of us and you can show support by creating trust in the workplace. Communicate regularly with your team.
Remember we are here and ready to help. We can be the business partner you didn’t know you could have. It can get very lonely when you are making all the decisions yourself so get in touch.
Call or email your normal contact at Myers Clark.