Insight from our experts

Lessons learnt in the recession

René Carayol
Quick Facts Name: René Carayol
Company: Inspired Leaders Network
Position: CEO

Having spoken in virtually every part of the country with Barclays Bank for the “Connecting Business” series throughout this year, one thing became obvious, explains René Carayol. As the UK moved from economic downturn into recession, the media led us to believe that the whole of the country went into the recession together. This was absolutely not the case. It quickly became clear that “one size fitted nobody”. Some parts of the UK slid early into the recession whilst others felt impervious or the worst had yet to reach them when he visited. Some areas were simply more resilient than others.


Don’t fall into the media trap of “one in, all in”

Sheffield was once the home of our manufacturing and steel industry and its industry base had been in decline for years. But this has left the city better equipped to deal with the worsening economic conditions than many others; they simply weren't in the state of shock that we experienced in London and Sheffield's lack of panic and thrifty attitude gave the people an unexpected confidence.

Moving on to Luton, in the shadow of the Vauxhall Motors plant, my expectation was that the complete meltdown of the automotive industry would have led to low morale and an air of despondency.

Again, nothing could have been further from the truth. Everyone had a bounce in their step, a degree of optimism and an air of pragmatism.

The lesson was simple. For those of you with national businesses, don't fall into the media trap of "one in, all in" when it comes to the recession.

There are distinct regional differences. But one thing that did remain constant wherever I went was a spirit of enterprise being alive and well. Even in these tough conditions there are 1600 new businesses registered every day in the UK.

Just remember, no major mega-fortune has ever been made outside of a recession. From Carnegie to Branson or Hearst to Gates, all proved that one person's despair is another person's opportunity. It's about attitude.

Throughout the series we saw real, live collaboration in action. At each event there was a trade fair of 30 - 40 local businesses; each setting up stands and showcasing their products and services. But they were not just there to display for potential clients but to be an active part of the business community. There was an almost Dunkirk spirit of collaboration. And it worked.


Learn from the past to prepare for the "new world"

Nothing is best done alone any more, especially in a recession. Now, more than ever, is also a time to take a careful glance back to the past to guide the way for not only surviving the current economic climate but to also prepare for thriving in the "new world" when the dust has settled and the chips have fallen into place.

Not everything old is bad and antiquated and not everything new is shiny and good. The real secret to success is to combine the best bits of the two. Let me explain a little more.

The rapid acceleration of the global downturn has seen some of the huge corporate behemoths unable to respond to new demands and their size has made them hard to manoeuvre and dangerously easy to break up. But this has given the smaller businesses an unprecedented opportunity to reinvent themselves and seize the opportunity.

After all, those at the sharp-edge of business inherently know that processes and policemen will never be a substitute for a culture of strong ethics and clear values. Organisations can get just too large to steer, manage or check. The best leaders and the most progressive cultures retain an intimacy, agility and trust that remain essential to any business, especially in a crisis.

Yet even despite this some smaller businesses try to copy their larger rivals and end up slowing themselves down and removing trust and empowerment as they also seek to remove any chance of a mistake occurring with hard-wired processes throughout their organisation.

A well intentioned "policing" approach lends itself to micro-management and stifles creativity and innovation. It also erodes the fabric of the business. This is the behaviour of "heritage" incumbents who unintentionally build cultures of "not wanting to lose", forgetting how to win in the process and losing sight of the customer.

Culture needs to find its place at the top of your leadership agenda NOW. Leaders fuel culture - constantly.


Review your culture. What would you reinvent?

Look at yourself and your culture today. What would you reinvent? And how can you grasp the nettle when so many are clearly faltering?

Perhaps now is the time to start preparing for the upturn and seeking out the opportunities that are still there if you REALLY look. At every stop I told the story of "two lemons".

Martha's Vineyard has long been synonymous with the most delicious lobster but even the thriving fish markets amongst the holiday homes of the well-to-do have been hit by the economic downturn.

All the lobsters were still on display on my last trip there in September but very few were being sold. Except for one thriving stall. The owner had crafted a hand-written menu on how to prepare "lobster in lemon" and left a basket of lemons next to his exquisite lobsters with a simple sign saying "buy a lobster and take a menu and as many lemons for free".

When I asked him how sales were the answer was incredible. He was selling more than ever before and each time customers would take a menu and just two lemons.


What’s your value added proposition?

Chrysler Dodge got a recent promotion all wrong with "buy one get one free". Their cars have been devalued forever.

Think instead of a deal run by Hyundai - "get your company cars here and should you be made redundant we will give you your money back free". No reduction in price yet what followed was a dramatic rise in sales.

All the research we have performed tells us that most businesses predict recessions to be far more price sensitive than they really are. It always leads to discounting and promotions that drag companies into a price war. And when that happens, there are no winners.

So what can you give away that's relatively low cost to you but high value to your customer? Throughout the "Connecting Business" series there were countless examples; from a firm that rented out office space and offered the first week free, to a print management firm giving a free print audit to see what you could save, to a water cooler company that offered coolers that didn't needed to be refilled and transformed the bland traditional cooler into something eye catching by branding it to each company's colours and logos free of charge.

What are your two lemons? It is a question that I still receive answers to via email every day, showing more than anything that it's good to talk but so much more powerful to listen.

One of the real strengths of the series was creating an environment for constructive conversation. It's fair to say that not all the banks have listened as much as they should have in recent years and perhaps customers haven't spoken up nearly enough. These events made sure customers were given a damn good listening to.

And here is the final lesson. If you want some free, top quality consultancy, take your angriest customer out to lunch.

5 top tips for changing culture

. Leadership is not management; it is how you energise people towards your vision.
. By letting your people know that you have made mistakes they will try harder without fear.
. Make bold promises and deliver them.
. Assemble a "band of believers". There is no room for cynics, make tough decisions early.
. Ensure you have personal encounters with customers every day. Think like your customers and feel what they feel.