As we grow closer to the midpoint of 2023, many business leaders are worried about what lies ahead.
Undoubtedly, they face headwinds on many fronts. The long-tail impact of the COVID-19 pandemic continues to reshape businesses while novel employee trends, stubbornly high inflation, and fears of an economic recession loom large on many managers’ minds.
According to one executive survey, 51 percent of respondents said the U.S. economy is already in or will soon enter a recession, and business leaders responding to PwC’s Executive Pulse Survey cited “acquiring and retaining talent as a serious risk.”
With many media and tech companies announcing high-profile layoffs, it’s easy for bearish sentiment to overshadow the opportunities that will inevitably emerge in late 2023 and even into the next calendar year. However, more than three years after a global pandemic forced companies to change and adapt with stunning scope and speed, we’ve never been better at evolving to ensure resilience, maintain growth, and propel innovation.
Regardless of the challenges and opportunities that emerge, each business has an opportunity every day for their story to still be written, and future forecasts are not destiny. Here are three priorities worth pursuing for leaders looking to achieve sustainable success in any business environment.
Frugality, the practice of being careful with money and avoiding unnecessary expenses, is critical for long-term business success. While it’s not as fun as lavish spending on ubiquitous and superfluous amenities or other business elements, it’s crucial for keeping operations running smoothly and avoiding financial difficulties.
For example, a July 2022 Gartner survey revealed that 72 percent of Chief Financial Officers (CFOs) plan to reduce real estate and facilities management expenses in response to more expansive remote or hybrid work programs. Similarly, tech companies like Google and Meta are lowering or eliminating costly employee perks offered at their on-site campuses, including free laundry and meal services.
By being frugal, businesses can save money, which can be used to invest in growth or to weather difficult economic times. Additionally, being frugal can help companies maintain a good reputation with customers, investors, and other stakeholders, showing that the company is responsible and conscientious with its finances.
Frugality is a subjective term, and it will necessarily look different at every company, and it might include:
- Managing cash flow effectively. Regularly review budgets and make adjustments as necessary. This can help businesses plan for their expenses and avoid overspending.
- Defining realistic profit margins. Global market conditions will, to some extent, dictate reasonable revenue and profitability expectations.
- Keeping a safety buffer in the bank. A rainy day fund can help businesses weather an economic storm. It’s a wise practice in any environment, and it can be especially helpful when broad economic conditions impact revenue streams. In addition, companies can consider securing lines of credit and nurturing soft opportunities for funding.
Overall, frugality is about being careful and mindful with money and making smart decisions that will help the business succeed in the long run.
Times of abundance and rapid influx of cash often lead to additional investments in R&D and innovation, spearheading multiple parallel efforts and experiments. In times of uncertainty, double down on what works best. Avoid risky experiments and relocate spend to providing great quality toward your main source of revenue.
This could involve identifying the most important aspects of the business, such as its core products or services, and focusing on them to maintain or even grow market share. For example, a company that sells a wide range of products may focus on its most popular or profitable items to maximize sales and minimize losses.
Taken together, better focus can help companies succeed in a downturn by enabling them to make smart, strategic decisions that will help them navigate the challenges of the economic environment and emerge from the downturn in a strong position.
Efficiency is often overlooked when business is booming. However, neglecting efficiency can lead to a number of problems, including increased costs, wasted resources, or poor customer experiences.
The new year is an opportunity to return to evaluate efficiency. Take an opportunity to identify and eliminate waste in your operations. This could involve things like reducing unnecessary steps in processes, streamlining supply chains, or cutting back on inventory. By reducing waste, businesses can save time and money and improve the quality of their products or services.
At the same time, companies can invest in new technologies that automate tasks, reduce errors, or improve operations.
Critically, leaders should use efficiency initiatives to engage employees who often have valuable insights into how a business can operate more efficiently. By engaging with employees and soliciting their ideas, companies can identify ways to improve their operations and make them more efficient. This could include implementing new processes, training employees on new technologies, or providing them with the resources they need to do their jobs effectively.
How Can We Plan for Better Futures?
While the future is anything but certain, the rest of 2023 may very well be a bumpy year. Fortunately, companies have been riding a rollercoaster since the start of the recent pandemic. Business leaders have proved themselves able to meet the moment before. It can happen again by prioritizing frugality and focus, keeping your staff updated, and asking them to contribute as much as possible.
Most importantly, now is the time to take action. Leaders that proactively pursue the right priorities will be best positioned to remain agile and effective regardless of what the economic climate ahead brings their way.
Mario Peshev is the CEO of DevriX, a global WordPress agency serving industries from publishing to fintech, healthcare, ecommerce and more. Peshev focuses the majority of his time on running his business and leading distributed tech teams at DevriX of 50+ people crafting high-scale WordPress solutions optimized for revenue. He is a Core contributor to the WordPress project, an Inbound Certified marketer, and a multi-disciplined business owner with a wide scope of skills. Follow him on Twitter @no_fear_inc and connect on LinkedIn.