The Marketplace: Our View

By Chris Moriarty

Joint Managing Director

 

Certainly these are interesting times. No doubt the first quarter of 2009 has felt like a down quarter. But it has not necessarily been one.

 

Strike Force Sales itself is up just over 20% on last year. The issue for our sales team has been that interest and enquiries have more than doubled, so there is a huge pipeline of interest.

 

I spoke to a colleague, a partner specialising in liquidations at one of the big accounting firms. He has experienced something similar. Lots of companies are talking about entering administration, but few companies are actually doing it.

 

Accounting firms are instead busy restructuring businesses to shield stakeholders from any future issues – there is a strong sense of future potential risk, but little immediate crisis.

 

I spoke with a senior executive at one of our big global clients and he noted an interesting trend… just about all of the job losses being announced in Australia appear well planned. People are being retrenched on the back of carefully thought out and well-executed planning, not on the back of emergency situations.

 

The point here is that if companies were in genuine trouble, they would lay off staff in a more haphazard fashion. What is really happening is businesses are using the downturn as an opportunity to re-size – actions are deliberate and planned.

 

So let’s thread all this together.

 

There is a strong sense that the future is uncertain and risks loom.

 

There is no real sense of panic.

 

Businesses of all sizes have used the first quarter of this year to sit down and carefully take stock of the current situation while putting in place plans to survive any sudden downturn.

 

Lots of businesses are re-sizing not because of immediate critical need, but rather because it seems prudent to do so.

 

A return to business fundamentals is taking place.

 

The most basic business fundamental is that all power comes from the barrel of revenue. So, while businesses are focussed now on their re-sizing programs, ultimately that can’t survive at all if they don’t keep on winning new business.

 

This means that over the next few months the whole economy is going to see a surge in sales activity. It will not necessarily result in a surge in buying activity – so we will see a hyper-competitive environment emerge, with fierce hand-to-hand combat being fought over every dollar.

 

Nothing is going to matter more than winning ‘that’ sale.

 

This is probably going to become the defining feature of the new economy that will emerge off the back of this global crisis. We will see a new hyper-competitive global economy against a background where risk is properly considered meaning heightened demand (and inherent competitive advantage) for accountability and transparency (the natural enemies of uncertainty).

 

It will be very exciting – in fact, it already is.