"What we have found in our survey is that the traditional response to a recession was the wrong response in 2008, and we believe it will be the wrong response now."
MARK THOMAS, STRATEGY CONSULTING, PA CONSULTING GROUPMark ThomasBBC Radio 4: The Today Programme5 December 2011
PA’s Mark Thomas, strategy expert, is interviewed on BBC Radio 4’s Today Programme. Mark talks about business confidence and the opportunities for companies emerging from the current Eurozone crisis. Mark draws on PA’s Managing Uncertainty survey in his interview.
Mark talks about the ‘silver lining’ for companies from this recession: “Although the headlines sound catastrophic, the way the recession will impact companies will depend far more on a finer level of detail - where a company’s competitors are, where their operations are.”
Mark goes on to give an example of how a company could prosper from the recession and talks about the opportunities for a global shoe making company: “If a global shoe making company has its European manufacturing operations based in Portugal and its largest European market in Germany, the fragmentation of the Eurozone which would see Portugal reverting to the escudo and a core Eurozone becoming a very strong currency. This would suddenly mean that their manufacturing base becomes even more competitive than it is today and their market becomes an even better importer, this would be very strong for them.”
Mark then talks about what companies tend to do in a recession: “What we have found in our survey is that the traditional response to a recession was the wrong response in 2008, and we believe it will be the wrong response now.
“What people normally do in a recession is to batten down the hatches and wait for business as usual to return. In other words, the strategy can be summarised as ‘wait until we are sure it is a recession, then cut some costs and then wait again.’ That made companies too slow, too cost focused and too passive.”
PA’s Managing Uncertainty survey, conducted this summer, asked more than 200 senior business leaders from across the world how they had responded to the financial crisis and what management strategies had proved most effective. Our analysis establishes which actions added value and which did not. Find out more here.