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There is light at the end of the tunnel

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If you're ever going to see light at the end of the tunnel, you must dare to look ahead, no matter how gloomy things are. Those who come out stronger from challenging times are often the ones who dare to think ahead even in a recession.

In an economic crisis it's easy to slam on the brakes, cut whatever costs possible, stick your head in the sand and hope you can ride out the storm. And let's face it; if all your revenues are collapsing while your overheads are piling up and your capital is close to zero, you have few options left.

But for anyone with some wiggle room, no matter how small, venturing to think ahead can prove highly lucrative.

Cut less than the others

At least that's what the research says. Marketing studies show that those who increase their relative share of marketing investment during a recession gain far more than they would have from making a similar investment during a boom. Quite simply, it costs substantially more to invest at a time when all your competitors are doing the same.

I usually draw on sports metaphors, and this time is no exception. The Olympic Games have been postponed. The fitness centres have closed. Cancelled events and lost sponsors are putting a squeeze on athletes' earnings.

Who do we think will bring home gold in 2021: the ones who put their training on hold until the situation returns to normal or the ones who press on with a new, specially adapted training regime and continue preparing for whatever the future brings?

The new normal

Because we will return to normal. Not to the normal as we knew it only a few weeks ago, but to a new normal that resembles it. Like our prime minister said: this crisis may get worse before it gets better, but it will pass.

Crises in the financial sector or in life in general are nothing new. They come and go. What matters is how we deal with them, and thinking two thoughts at once is critical, in my opinion. You need to adapt to the crisis to survive, but not make so many cuts that you can't start investing once it is over. In rough seas you're supposed to reef the sails, not throw them overboard.

That's why we have now posted the registration form for RSM's annual autumn trip. We would probably have faced little criticism if we cancelled it, but for us Plan A is that we should get together like we do every year. If the future shows that it can't be done, we'll resort to Plan B when the time is right.

Several new recruits are due to join us this autumn, and many would probably understand if we cancelled those employment contracts. But we've needed more capacity for some time now, and have every expectation of making full use of their skills. And yes, we will of course hire them even if they don't get to sit their final exam.

Did someone say “flexible”?

For many years we have talked about the need to change and be flexible. I strongly believe in taking take the chance to change while still operating, and lately we've seen several great examples of just that.

Take the aquavit distillery that's now producing hand disinfectant, or the sailmaker in Fornebu that has switched production to personal protective equipment, or Über, which has developed the Über Eats service, so now (as no one's going anywhere) they not only drive people, but also deliver food from restaurants.

And what about the Iceland grocery chain, which was the first to give its elderly customers an hour to do their shopping before everyone else was allowed to empty the shelves of items they suddenly felt a sudden urge to stock up on. Another good example of the ability to adapt.

An older example is how Siemens, in the wake of 9/11, adapted its medical scanning products for use at airports to prevent new terrorist attacks, creating what eventually became a business area in its own right.

You can if you want, as the saying goes; the question now is whether you want when you can!

 

Authors

Hans Ragnar Berg
Partner | Managing Partner

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