Metaphor

 I've been thinking about strategy. At times like this, survival is a more of a priority for many SMEs than long-term business goals. Forget about growth. We just want to be here this time next year. A sailing boat may have a good plan, making its way on course towards a destination, but when the gale blows it's time to shorten sail. Batten down the hatches. Stand by to take orders; and when I say orders I mean instructions to be implemented quickly else all aboard are in danger of going down with the ship. The chart is less about where we want to go, more about seeing where the risks lie and keeping clear of the rocks. Our heading isn't as important as simply keeping above water, surviving the gale, until the sun comes out again - it will - and the wind drops, and we can resume our long-term plans.

We often are too slow to take in the reefs when it's time to shorten sail, and too slow to shake out the reefs afterwards and get going again when the gale has passed.

The latest numbers on business insolvencies make grim reading.  There were 4,900  liquidations in England and Wales in Q1 2009, a whopping increase of 56% on the same period a year ago.  In the year to March 2009 about 1 in 130 businesses went into liquidation, compared to about 1 in 150 the previous quarter.  To continue the sailing metaphor; when the water level drops, boats that don't have enough cash flow from operations are stranded as the tide goes out. I think what we are seeing is some businesses who could get by in good times but cannot survive in lean times. 

Interested to hear views - how is the recession affecting your business strategy?