The struggle between light and dark

OK, that reference to the Manicheans might strike you as a little odd, so here is a short explanation. These were a Middle Eastern sect that believed the world was dominated by an unending struggle between light and darkness. They also believed that the balance between these two adversaries was so finely poised that ordinary people could make a real difference by lining up behind one or the other.

Well, you don’t hear much from the prophet Mani, founder of the sect, these days, but the struggle is real enough, and so is our ability to make a difference to the outcome. 2009 is going to see a constant fight in the marketplace and in our own minds between two very different attitudes; hope and despair. The outcomes are likely to be black and white, as well: there will be some winners and also quite a few losers. So how to make that vital difference? How to make sure that the balance tips in your direction?

Begin at home
We think that success for most of us in the year ahead is going to be determined by the things you do in your own markets, and probably with clients you already know today. Somehow, we all need to find ways of maximising our strengths and squeezing every little bit of value from our business while times are so difficult.

There isn’t space in a short letter to explain in detail how we recommend that you do this, but we can suggest three areas in which an improved performance is likely to make a positive difference. Here they are:

Focus on real value
We need to be realistic about this recession and what it means. We think that a lot of business based on speculative activity has now gone and will not come back anytime soon. That leaves plenty left over (a downturn of 3% still leaves 97% of last year’s business activity available to us), but it is going to be strongly focused on core business, core values and measurable outcomes.

This is hardly surprising but it does leave potential suppliers to consider very carefully what they can offer to drive value onto their clients’ bottom line in this fiscal year, and then to focus on this and drop everything else. In the past few years, when so much of our economies, directly or indirectly, were being driven by speculative bubbles, many service and technology companies made money from projects that were not strictly necessary, according to normal business criteria. That business has gone, so focus on the activities that are necessary and drive proven value. Sounds easy: many will find it surprisingly difficult to do.

Follow through to the very end of the value chain
When is value truly created? In our view, it’s not until you reach the very end of the value chain. In other words, not when your client pays you but when the ultimate end users (other business customers, consumers, a combination of the two) decide to buy the service that your client offers. To be sure of creating value, and therefore of preserving your own growth prospects, you cannot afford simply to mind your own business: you also have to mind your clients’ business.

The difference between success and failure in this very tough and very tight market could well be measured in your ability to create the conditions for your clients’ success. That means understanding better than ever before the markets they operate in, the customers they deal with, the pressures and influences that affect them, and then being proactive in taking your insights and practical solutions to them - even if they don’t ask you to do so. One other point to bear in mind: don’t hesitate to look critically at your own clients and ask yourself how good they are at creating client value. Then focus your efforts on those that come out best from this review.

> part 2