As 2009 unfolds, the likely depth and duration of the economic downturn remains unclear. The present illiquidity and instability of the world’s banking systems have seen no parallel since the end of World War II.
Unprecedented actions by governments and central banks seek to recapitalise the banking system so that lending can be sustained. Governments continue to pump up public investment programs to stimulate business cash flows and improve unemployment. Others are relying on tax cuts and increases in social security transfers to drive prime consumer spending.
It is undoubtedly an unfamiliar and challenging time for many businesses.
For senior managers and executives, navigating through the complexity is fraught with difficulty. Instinctively the urge is to cut costs and go into ‘lock-down’ until things get better. But every downturn creates opportunities to challenge the status quo. Managers and employees can come to realise that the firm cannot continue to behave as it did in the past. A downturn lowers resistance to change and cuts through complacency, allowing managers to harness the energy released by these events and make radical changes to an organisation’s strategy, structure and culture.
A guide to surviving turbulent times outlines what KPMG believes to be the six key priorities and elements of an effective business survival and recovery strategy.
- Understanding why cash is king.
- Adopting a strategic approach to managing costs.
- Dealing with debt.
- Getting smarter about tax.
- Managing risk in uncertain times.
Preparing for growth.