“Although health and safety today are our first concern, many people start wondering what their job will look like after Corona when we are heading for a potentially large period of recession. Being in the niche of Portfolio & Project Management, it is our job to share our views on value creation for people in roles like Project Director, Enterprise PMO, Portfolio Manager and many more. In this first part, I will share some thoughts of what I’ve learned since the latest crisis. I hope it will help you decide on the next steps within your organization”.
Learn from the past to anticipate the future
Throwback to January 2, 2008: My first day at Threon, first day in consulting, … when the world was also heading for a large period of recession. What did I learn?
- Learning #1: Ask for the dress code upfront… What might have looked perfectly normal during 10 years of ING, did not fit a smaller & pragmatic consulting firm like Threon… 😊
- Learning #2: Consulting might not be the easy way in times of recession… Although we might have called it visionary to leave banking just before the banking crisis, shifting to consulting at first was less of a success. Threon, like many consulting firms, quickly got into heavy water and we had troubles getting our pipeline filled.
- Learning #3: Focus on customer value and the best cost-benefit offering. After taking the first hit, we fully focused on two things. 1. How can we add high value for our customers in economically difficult times and 2. Which team (expertise AND cost efficiency considered) is the best fit to fulfill our customers’ needs?
- Learning #4: Prepare, anticipate, … together with customers!
The positioning of your company towards recession will define your Enterprise PMO’s priorities
Although there is not 1 type of organization and not 1 way to deal with recession, at least it is always good to look at some real results from the past. The article of Ranjay Gulati, Nitin Nohria & Franz Wohlgezogen studied the impact of how CEO’s dealt with recession, by studying the actual results of companies before, during and after recession. In short, the outcome of their study clearly showed that most successful CEO’s :
- Were not the ones who bravely rushed forward and put absolute focus on growth investments (very popular on LinkedIn these days), nor the ones that were the first and bravest in taking hard FTE reduction decisions. The combination of both even proved to be the worst possible combination (on a total of 4700 companies studied – during 3 periods of recession)!
- Were the ones that succeeded in finding a subtle balance: those who reduce costs selectively by focusing more on operational efficiency than their rivals do, even as they invest relatively comprehensively in the future by spending on marketing, R&D, and new assets.
In my next blog article, I will discuss trends in Portfolio & Project Management to tackle the recession challenges and how Enterprise PMOs can prove their added value to the CEO.
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Source: Gulati, R., Nohria, N. & Wohlgezogen, F., “Roaring Out Of Recession”, (March 2010 Edition of Harvard Business Review).