DBA Members’ Forum | October summary

In tough times, what are the two or three things you can do or put in place to stay on the front foot?
Try hard not to overreact. See the data, don’t overanalyse it and work out how to get through. Keep cash balances high. And be thoughtful about what you’re not doing – e.g. over-hiring – and thoughtful about what your are doing – e.g. lead generation.
 
Which data should we be looking at?
Not the data from the labour market or the larger macro economic indicators. Focus on reading the signals you’re getting from your clients and your lead generation pipeline. Unless you’re horizontally positioned.
 
What do those signals look like?
The slow roll out of something that’s been in the offing for a while. If you hear pause, overinterpret that, as it will probably be cancelled. Or late payment – make sure you stay on top of that. Or perhaps a client has decided to freeze hiring, or has decided against going to an international show they usually go to.
 
How do you develop your teams’ capabilities to read those signals?
Make sure you have the right people in touch with / face-to-face with clients – it doesn’t matter if they have the account management title. These people a) have a track record of growing the account, meaning they can ensure the client doesn’t pare back too much, and b) have historically been good at reading the signals. This might not be someone who is fantastic at project management, as they tend to focus on other things. If you don’t have someone like this, then you need to step in and get involved before the relationship goes wrong.
 
Is diminishing marketing spend a signal?
It is possible that you’ll see marketing spend as a percentage of overall sales dropping, but overinterpreting that signal means that you’re not understanding how that spend breaks down. A lot of the cut in spending would be on media spend or other marketing spend, rather than fee spend.
 
What are your priorities as a leader at times like this?
Really great leadership is about knowing why you exist, being clear and communicating that, and preserving the business and its health even when you have to make some really tough calls. So that means having a constant commitment to new business: not being interchangeable in the market place, knowing who the ideal fit client is for you and having even just a basic marketing plan that is spinning all the time.
 
So how do we keep our cool and maintain perspective through tough times?
You need to look at the big picture and be flexible enough so that when the drop in revenue comes you still have what it takes to get the next year through – stay focussed on staffing and new business.

You’ve talked about the vital importance of positioning, and in desperate times there’s a danger of being tempted to lower standards and take on opportunities that aren’t the right fit. How do you avoid doing that?
This is where it’s helpful to be intentionally flexible as a leader – if you don’t have enough work as you’d like for your people and you don’t want to make redundancies, if something comes along that wouldn’t normally fit, it’s ok to take that work. It’s just not ok to not be honest about it – don’t fool yourself that you’ll turn that client into the right fit. And involve the staff in the decision so they understand. Also be prepared to step in if the opportunity results in any disruption.
 
There might be times when the owner of the business needs to take time out – what would you have in place that would enable that to happen with ease?
You need to build that into your firm with a systems driven approach so that other people can easily step in and work the system. So that you don’t have those single points of failure.
 
What is your advice to really small businesses?
Don’t pay off any debt early – make the minimum payments. Don’t take on any new debt. Always have a spun up marketing plan running. Have 6-12 months of cash set aside at any given point. And take advantage of the fact that you’re so nimble and you can attack things really quickly, which larger organisations can’t. Do the right things and sleep well at night, and if the business struggles still, don’t beat yourself up about it. It involves luck too. You folks are smart and hardworking and you’re alternately employable. It’s easy in a discussion like this to think of the enemy as out there; the economy or the client. I think the enemy is largely within; your ability to make good decisions under pressure, keep an even keel, and be disciplined in doing the right things. Look to your own leadership, not so much what’s happening in the marketplace.

Our Members’ Forum takes place on the first Monday of each month, at 4 – 5pm. If you would like to attend, get in touch here. 

Our next members forum will be taking place on Monday 7 November.