As I have mentioned in my blog before also, these are some very interesting times. There are different ways to look at the current fiscal. One set of opinion might say we are in a slow down, yet another would point to the fact we are yet amongst the 3 fastest growing economies globally. 7-8% growth in slow down times is something many economies would take without blinking an eye.
Now that apart, it means some interesting set of things:
- At the very outset, its time for them to look more inwards than outwards
- Organizations would be under pressure for margins. Cost structures in many cases are aligned to higher growth which may not happen for an indefinite future. Several organizations might shift their priorities from top line growth to margins
- Cost management would become paramount as a consequence of above point. Slow down in hiring and salary increases is an immediate visible impact
- While in absolute terms everyone would gain, in relative terms most of them would be in red. Increments less than inflation, business growth less than planned etc
- Its time when many organizations would carry out internal consolidation initiatives, which otherwise were not able to find time in tight management calendars. Since many of these organizations have over grown their systems, processes and structures, these will be times when some of these will be very closely looked at
- From HR point of view, tightening of Structure and Performance will find prominent presence in corporate agenda for majority of organizations
Let’s take Real Estate industry as an example.
In times of exponential growth in past 3-4 years, several organizations grew more than their internal capacities. In case of real estate they small and mid players would often exhaust their internal capacities in acquisition phase of life cycle itself. Just launch of project itself would result in booking of sales and in process creating resources for moving the project forward. It was almost that they were making money for project management skills. Taking money from consumer to create what they need was fantastic.
However in times like this many of them would struggle. They will struggle to make meet ends and would be under severe pressure for resources. These are times that will push them to do the following:
- Align growth to internal capabilities and not external opportunities
- Sell out for players who simply can not finish projects which are in work in progress stage
- For large players it would mean concentrating on setting the house in order
In end like they say nothing is white or black…there is a lot of grey. Basis how an organization had planned in the past in terms of solidity of that plan, and basis how they plan now, different organizations will go through very different set of motions.
~~Rohit~~
Rohit Jain