Dmitry Leus, a financial expert and businessperson with many years of experience, tells about the development and strategies for doing business in times of crisis. Why does the crisis act as a chance and opportunity for some companies and as a death warrant for others? What lessons need people learn from the crisis? What to make a focus on? What is the business strategy for choosing and when to make adjustments?
The topic of the crisis has been increasingly raised and used equally to justify the lack of results and explain the phenomenon of the intensive development of personal market segments or companies for 5 years.
Some people bemoan the complexity of the situation and ask for additional subsidy programs, and others find internal reserves, change their strategy in time and feed into the market at the leading positions.
All that has happened and happens with many Russian companies now is a natural result of the growing market, with a low share of competition and unstructured approach to both company management and so-called situational management.
In other words, the market level allowed many companies to be a coward but remained profitable at the same time, and the direction of risk management was more like a trend than a service tool in some companies.
When ‘this’ (crisis) had happened, it became obvious and understandable who was ready for this, and for whom this news was like a death. It would be right to make sense of the notion ‘crisis’ and decide when it occurs.
Our first question has been to comment whether it is possible to avoid a crisis.
According to Dmitry Leus, any development and reaching a new level are possible only through a crisis. No matter how it sounds, this is just the case.
Leus states,”The crisis never occurs unexpectedly. It is just necessary to learn to see the harbingers of the crisis and respond to them in time. This phenomenon that is supposed to be a crisis is called force majeure by amateurs and a regularity by professionals.“
The saturation of the market and the appearance of major and system players on it activate crisis phenomena, i.е. they act as catalysts of the crisis for others.
Bad established internal business processes, insufficient or excessive bureaucracy, ‘overseeing’ top management, the lack of the understandable and manageable development strategy for the company, unbalanced price policy, the staff overage, a low internal culture, and an uncivilized approach are the components of crisis phenomena in many companies.
Leus says that it is necessary to notice that global trends and tendencies affect the business, therefore they should also be taken into account. This situation is comparable with a frog, which people placed in the cold water and began to warm it up slowly.
Many companies are like a frog. Having been in a crisis, they begin to be ‘boiled’, but either do not realize it or calm themselves by the fact that it is necessary to sit tight. Here, it is right to recall the theory of business development where any changes and growth are possible only through a crisis.
If this crisis is managed, then the company moves to a new level and gets a competitive position. If it occurs because of the lack of necessary anti-crisis or stimulating actions, then there is a high chance that this company will not be on the market soon.
Dmitry claims, “Analytics, synthesis and the flexible strategy, which have a highness of responsiveness and feedback, as well as the professional management, allow minimizing risks and reorienting business and products to meet current market needs.“
The second question has been about the conclusions that are necessary to be taken out of the crisis.
According to Dmitry Leus, if the top management of the company looks at the situation honestly and objectively and gives a valid estimate of its own decisions and actions without shifting responsibilities on the masses, then such a company has a future.
It is possible to make mistakes, make wrong decisions, make revolutionary decisions and use innovative methods. The main thing in this situation is that every member of the company understands its course.
Dmitry says,”Publicity and fairness are the basis for the development of the company and for the creation of a strong and professional team. The team that often does the impossible.“
He also claims that both the flow and balance are the trends that determine the presence or absence of the future of the company. It is about the flow in assessing the situation and making the important decisions, the flow of the implementation of changes and the staff development.
Figuratively speaking, the crisis is a kind of examination, which the top manager of the company must pass. If he or she prepared and worked on this discipline diligently, then success is assured. Although in this case, it is necessary that the individual take into account the global trends and changes.
The last question is about the choice of the right decision during the crisis.
Leus states that there is no single and correct recipe for how to act properly during the crisis.
If it could be possible to separate it in three points, then they would be the following:
- A flexible and adaptive strategy with a planning horizon of 1-2 years with the mandatory quarterly checkpoints
- The publicity management position and a culture of feedback in the company, thanks to which the important information necessary for making strategic decisions rises to the analytical center very quickly
- The diversification of risks and business directions, a competent and balanced policy of support, a multifactorial analysis and synthesis of managerial decisions, a professional management and a team that understands and shares all changes in the company.