After some years of strong economic growth, we are suddenly facing times of uncertainty. COVID-19 is causing both public as well as economic chaos.
Most companies are already hit by the consequences of the pandemic. Sales are slumping and for some industries, sales even dropped to almost zero. We have no other option than to act now. I see a risk though, as many executives will be laser-focused on cutting costs. Obviously, we must survive these challenging times, but we shouldn’t lose sight of our real objective, creating growth!
Our strategy ought to provide an equal focus on how we are going to increase our top line (again). Although it is obvious, restructure your costs, without cutting the muscles of your business:
• Tightly manage costs, working capital and CAPEX, but do it with a strategic view
• Divest noncore assets / noncore activities to invest in your core business
• As cost of capital still hover around historic lows and company valuations are likely to drop, use M&A to reshape your business and to acquire new products, service lines, customer segments or capabilities at lower prices.
The future value of creating growth is greater than the limited $ / €’s you may save in the short-term.