It's The Economy Stupid | How your business can survive the Crunch

To borrow the phrase from Bill Clinton's successful election campaign back in 1992, everyone is talking about the economy at the moment, with the G20 shindig in London drawing yet more attention to the subject.  But what do you think the economy is doing? 

We asked some 15,000 of you to give us your opinion on the state of the economy and how it will impact on your lives in 2009, and some interesting findings were unearthed.  I'll put a few of the biggies below, you can read the full economic output report here to find out more.

The recession will be long and lasting

That's the view of the vast majority of those CMI managers asked.  Some 60% of you thought the recession would last for over 2 years.  In the same vein, over 80% of you thought that the UK's GDP will fall in the next 12 months, which is in line with Alistair Darling's budget prediction of a fall in economic performance of around 3% in 2009.

Keeping your heads above water

The news is awash with companies suffering bad times in the current slump and this is reflected in the survey.  Over half of you reported that finance was less available than it was six months ago, and optimism about prospects for the next six months showed a particularly gloomy outlook amongst Britain's managers, although in the longer term optimism remains steady.

Where the axe will fall

Worryingly human resources appears to be the area most under pressure from budget restraints, with nearly half of you reporting that recruitment has been hit by the downturn and over a third reporting that training on management development has also been cut over the next few months.

What can you do?

Ok, so it's a pretty gloomy outlook, but what can you do about it?  It's proven (by scientists no less) that providing solutions alongside a scary message is the way to go.  So, with that in mind here are what we think you can do to get through these awkward times.

Top Crunch Tip #1 - Invest in skills

Skills investment is top of the list, but investment in new plant and equipment should not be forgotten. There is a significant risk that cuts in investment will “overshoot”, limiting future competitiveness.

Top Crunch Tip #2 -  Put extra focus on the customer

Customers should always be your number one focus, but now more than ever is the time to go that extra mile to make sure your customers receive the very best service from you that you can muster.  Loyalty and retention are not only key now but will be crucial when the economy recovers.

Top Crunch Tip #3 -  When cutting costs, seperate the wheat from the chaff

Cutting costs is very tempting when finances are stretched but make sure you don't cut costs that directly impact the customer.  Toyota are experts at so called Pull Systems, ie stripping out anything that doesn't directly benefit the customer, and it's a superb way of becoming a lean organisation.

Top Crunch Tip #4 - Refocus staff rather than lay them off

Building outstanding teams is incredibly difficult.  Keeping them together is arguably even harder.  In these troubled times it' sometimes hard to resist the urge to make people redundant to reduce costs.  We produced some research last month however that showed that refocusing staff onto other tasks is a great way of keeping teams together.

Top Crunch Tip #5 -  Be candid

Candour is something Jack Welch preaches all the time and never is it more important than in a recession.  Now more than ever you need to know exactly where things are going wrong.  The sooner you know, the sooner you can go about fixing them, so encourage staff to be candid and report failures in your business.

CMI Managers, lend us your tips

There are a few more tips in the full report, which you can download here.  As always, if you have any tips of your own on how your organisation is surviving the Crunch leave a comment below, you never know what other member you may be helping out.