The popular belief is that this new environment, which we could call crisis, is bad news for all companies. However, the reality is different. There are systematically companies that come out strengthened from complicated situations. In fact, one of the most important conclusions of the study is that 23.5% of them are reinforced in these situations. What is your secret? Change the management model, take advantage of opportunities and correctly lead teams, making the right decisions
To identify the differences between them, an analysis has been carried out in one hundred eighty-three companies and more than three hundred cases, concluding that the differences lie in acting in the lines of action that we call “Decalogue of opportunities strategic and operational ”:
1. Redefine your strategy based on the new environment.
2. Control the cash, profitability and delinquency.
3. Refinances the debt and optimizes the current.
4. Innovate before the new needs of your customers.
5. Focus on your good customers and products, and abandon the rest.
6. Selling is key, but it minimizes risks and costs.
7. Don't lower prices indiscriminately.
8. Produce only what you sell and improve productivity.
9. Take advantage of the infinite possibilities of purchasing management.
10. Redesign the organization, retain talent and make decisions.
Refinancing and adjusting resources to sales. Regarding refinancing, an analysis is carried out of the companies that undertake it and successfully resolve it, as well as the tools they use. There is also a section on adjusting resources and sales capacity, because it is a measure that is systematically used in best practices and that has a great impact on profitability and cash flow. A decalogue is developed to carry out the restructuring process in an optimal way, minimizing the negative impact on the organization.
After all this, emphasis is placed on the concepts of implementation and change management, since it is critical that all ideas and action plans become reality. The methodology to transform the company is explained, as well as the necessary attitudes in the leaders to achieve success in these situations.
I would like to recommend that you read this work thinking that it is a tool that can help you successfully manage your company in the new environment. To do this, at the end of each section, I suggest that you spend a few minutes reflecting on the impact that each topic discussed can have on YOUR company, in order to develop a work plan to take advantage of opportunities. Let's do it!
If the previous study was the largest and earliest performed on crisis management, this edition delves into the topics studied, while expanding the size of the sample analyzed. In-depth managers, senior managers, and management practices of one hundred and eighty-three companies representing the Spanish business fabric have been thoroughly discussed. In addition, the experience of the Improven team has been used in more than three hundred cases.
The companies participating in the study are a sample of emblematic sectors of the Spanish economy: industry, services, retail and wholesale distribution, food, automotive, leisure and tourism, real estate and construction materials (See Chart I). In order not to distort the results and in order for them to be fully representative of different sector realities, no sector exceeds 18%.
By billing levels, (See Chart 2) companies are organized into six groups: 12% less than 10 million, 23% between 10 and 50 million, 26% between 50 and 100 million, 21% between 100 and 300 million, 10% between 300 and 1,000 million and 8% with a size greater than 1,000 million euros.
Regarding the nature of the companies, like the Spanish business fabric, a very important part of the sample (81%) are family companies and 19% are non-family, mainly multinationals.
A very important part of the sample (81%) are family businesses, and the remaining 19% are multinational
Regarding the structure of the report, this document has five parts. In the first, it is developed why, contrary to general thought, the crisis is an opportunity. In the second part, the best practices are identified from the strategic and operational point of view (the “Decalogue of strategic and operational opportunities”), which have been shown to be successful in the different areas of the company. Then there are two sections related to the adequacy of resources for sales and the debt refinancing process. The report ends with a section on implementation and practical lessons for leaders in situations of change (the “Decalogue of good leader attitudes”), where the concepts of how to implement the lines of action in the company are developed.
Usually it is said that the crisis is an opportunity but rarely with a scientific basis to demonstrate it. To study this phenomenon, at Improven we have carried out this research work studying the behavior of many companies: their competitive position, their practices and their results throughout the years in which there were various sectoral and general crises.
The conclusion has been conclusive: 23.5% of the companies studied were reinforced in the medium-long term, that is, they improved their competitive position during the crisis. This data is very important because it does not mean that 23.5% have survived the crisis, but that they came out reinforced from it. This fact invites optimism and reminds companies to focus on improving every day to take advantage of this opportunity.
The explanation for this is because when the crisis arrives, the sectors usually reduce both in size and in number of competitors, so there is a tendency for a larger distribution of the market. To illustrate this argument with an example from a specific sector, a study was made of a food subsector that went through a major crisis. It was an atomized sector with a total turnover of 2,306 million euros and made up of 72 companies, of which five were above 100 million euros of turnover, concentrating 44% of the market share:
After a few years of crisis, the size of the sector decreased by 22%, and the number of its companies went from 72 to just 31, with 57% disappearing. There were many closings, and some acquisitions by the leaders of the sector, with which practically 60% of the quota was concentrated in three companies:
If managed well, clearly, the crisis is an opportunity: 23.5% of the companies studied came out reinforced from the crisis
The industry leader went from invoicing 230 million with a profitability on sales of 7.3% to invoicing 564 million with a profitability of 11.2%. At the same time, the average profitability of the five largest companies increased from 4.31 to 8.3%. This is a real case that clearly illustrates the concept that we are highlighting among the conclusions of this study. Any crisis is a long-distance race for all the participants in a sector and fosters the survival of the fittest: the fastest, the most prepared, the one who makes the most effort to survive and get ahead. For this, it is decisive to manage better than the competitors in order to be victorious in the sectoral redefinitions.
When the cycle changes, companies take measures to ensure their viability and competitiveness. In fact, 93% of companies have faced restructuring processes of some kind.
Therefore, the main objective of this study is to study what measures companies take and identify the differences between those that achieve good results and those that do not.
If managed well, clearly, the crisis is an opportunity: 23.5% of the companies studied came out reinforced from the crisis
The industry leader went from invoicing 230 million with a profitability on sales of 7.3% to invoicing 564 million with a profitability of 11.2%. At the same time, the average profitability of the five largest companies increased from 4.31 to 8.3%. This is a real case that clearly illustrates the concept that we are highlighting among the conclusions of this study. Any crisis is a long-distance race for all the participants in a sector and fosters the survival of the fittest: the fastest, the most prepared, the one who makes the most effort to survive and get ahead. For this, it is decisive to manage better than the competitors in order to be victorious in the sectoral redefinitions.
When the cycle changes, companies take measures to ensure their viability and competitiveness. In fact, 93% of companies have faced restructuring processes of some kind.
Therefore, the main objective of this study is to study what measures companies take and identify the differences between those that achieve good results and those that do not.
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