Saturday, February 7, 2009
Going Back to Basics
While U.S is still haggling over the price tag it has to pay for the stimulus package, more and more people are losing jobs everyday. Companies closing down daily and this becomes a domino effect across the other continent as most countries are dependant on U.S market as the major trading partner. Basically, when the consumer market plunge so will the demand for imported goods. we are very much interconnected globally through our trading.
I have some experience when the company I worked in face with the economic crises. Back in 1998, I was working in the general insurance industry. MAA ( Malaysian Assurance Alliance) was the third largest composite insurance company back then after Great Eastern and AIA . During this period when most other insurance company was consolidating their resources and cutting spending. The MAA president then decided to embark on a daring expansion program called STAR (Small town and rural) development. we nickname the strategy STAR WARS to spice up the campaign. We were entering into the smaller town that have potential growth and the strategy worked well in bringing in additional revenues to the company after deducting the expenses. The whole ideas was that when the economy picked up so will the revenue generated. In a way, people will be more appreciative because we were around during the bad times. Interesting and relevant strategy for a certain period. The last I heard of it, everything when into reversal by closing of branches and relocating of staff in the STAR program. The strategy was good but it did not last long. The failure in the strategy on the later part was lack of sensitivity to the changing business environment. One of the common challenges faced by big corporation is the speed to change.
I am a firm believer and practitioner in "Going back to Basics". when times are good, our head swell with pride and forgotten to prepare ourselves for the worst . We begin to think that we are already big enough to weather any financial challenges. Arrogance can be a fatal mistakes for any business. Based on observation , the economic cycle is every 10 years. In other words , when we get out of this difficult times, the next cycle of recession would be in the coming 10 years. However I am not an economist and this are my assumptions based on my experience and observations.
Going back to basics is all about returning to the fundamental of every business. Here are some of it.
1.) Customers are the reasons your business exist so treat them right.
2.) Your employees are the most important assets so focus on employing the right employees and ensure they are motivated to work with you.
3.) Cash is King
4.) The core values of the company is very important to drive the people within to realise the vision.
5.) Change is inevitable so "Always be prepared" as my ex boss Mr Richand Wong puts it.
Do you have any further input on this, be glad to hear from you.