PracticeAccounting FirmsPractice special: surviving the recession – making a breakthrough

Practice special: surviving the recession - making a breakthrough

The economic downturn is a perfect time to get your business back in order

It’s strange how seemingly unrelated events can get the mind whirring. Two
events got me thinking about business performance in the current economic crisis
particularly when it seems advice about what strategies and tactics to adopt in
the ‘downturn’ has turned into an industry in itself.

The first event is related to a forthcoming business trip to Hong Kong. A
colleague and I had been preparing to meet clients and speak at a number of
business events including some key Hong Kong and Australian institutes. In a
conference call with the CEO of our regional business partner, he pleaded with
us not to use the R (recession) word.

He warned that the business people we will meet, because of their culture,
would acknowledge the difficult times we face but they also believe that to
focus too much on the negative will affect their ability to deal with the issues
they face. It was explained that the word ‘crisis’ in Chinese is made up of two
symbols, one meaning ‘danger’ and one meaning ‘opportunity’. We were given clear
direction to focus on opportunities, as good business managers in South East
Asia are already preparing their businesses to deal with the dangers.

The second event occurred when I recently facilitated a strategic planning
day for the board of a well-known rugby club.

Now I have to hold my hands up here ­ I have never been a great sports fan.
International games have won my attention sometimes but I’ve never quite had the
passion I’ve seen among colleagues and clients. What has always been interesting
for me is sporting performance of individuals or teams and the similarities with
business performance.

One member of the board is an ex-England player and a very successful England
captain who knows a great deal about individual and team success. Sports fan or
not, you could not fail but to be inspired by this sporting legend. As the day
progressed and we discussed the performance on and off the field that
contributes to success in the business of rugby, I realised we could have been
talking about any business and the ingredients required for success.

As I reflected on these two events, they reminded me of four key
characteristics I’ve seen in those businesses I’ve worked with over the years
that seem able to deliver sustained success, even through downturns.

Sound financial management

Our business started in the early 90s recession (sorry to use the R word). We
are now embarking on an expansion plan during this recession. A significant
reason we are able to do so is the culture of sound financial management our
managing partner (who is, incidentally, Hong Kong Chinese) insists on in good
times as well as not so good times.

Through the media we hear daily of the tough decisions now being made about
cutting overheads. Sadly, some really tough decisions being made now are due to
a relaxed approach to budgets and forecasts in the past. I recently read about
one firm that was taking all unnecessary cost out of the business. When is there
a time any business could afford unnecessary costs? Even firms who should know
better and who advise their clients about sound financial management sometimes
need to practice what they preach.

Positive outlook

There is a great deal of fear about at the moment. Many people are, not
surprisingly, fearful about their jobs and management is fearful about the
future. Fear can be such an overwhelming negative emotion that it can stop

In the sporting arena, top athletes constantly live on the brink of failure,
of losing, of being dropped, injured or sacked. They train their minds as well
as their bodies so that fear does not affect their performance. They exude
confidence and give their best even when the pundits tell them they will fail.

There are many opportunities despite ­ or even due to ­ the current crisis.
Those with a positive attitude tend to spot opportunities; they demonstrate
confidence about their future and focus on taking action.

Some are so paralysed by fear that too often they can’t see opportunities or,
if they do see them, they freeze and lapse into inaction.

Personal performance

That famous England rugby captain I mentioned before told me all he ever
asked of a player is that they do what the number on their shirt asks of them,
and do it exceptionally well. Anything else they can give to the team is a

The results that any company, firm or organisation achieves is the sum total
of many individuals’ personal performance. The best team captains or business
leaders demand consistent high performance and create an environment where
individuals can give their best. There has never been a time when personal
performance has been more important both for our organisations and personally,
especially if we are to avoid being dropped from the side.

Training and development

I asked a rugby coach what happens when their team loses or faces a difficult
season. The response was: ‘We train harder and longer.’

It’s what you would expect. Training, I was told, has a huge impact on
players’ skills and motivation. I guess no one would expect the coach to say:
‘No more training until we start winning.’

The same is true of those mid-sized accountancy firms I’ve watched deliver
sustained success over the years. They are still investing in focused and
relevant training to make sure that individuals can deliver the performance
required of them. These organisations have recognised that they need people who
are trained and motivated to give peak performance both now and when the
inevitable better times return.

This is not by any means an exhaustive list of characteristics required for
sustained success but they are certainly four of the fundamentals. The most
successful accountancy firms of the future will have considered these
characteristics and implemented appropriate actions to ensure they come out of
the current climate stronger than ever.

David Tovey is managing director of
Pace Partners

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