Coming out of recession – what should we all be doing?

As a survivor of multiple down-turns, John Patch describes four key challenges along the "coming-out-of-recession" journey.

The recession has brought with it some catastrophic commercial situations, the worst of which is the loss of so many companies and many thousands of people from the construction industry.

But we’re coming out of recession, all is well with the world; well, the UK anyway;

And we’ve nothing more to worry about. Optimism reigns supreme. What were we all concerned about because we don’t need to be concerned any more.

Or do we?

In terms of things to look out for, coming out of recession is almost as challenging as going into it, or actually being in it. Indeed some would argue that the challenges facing companies coming out of recession are greater……….different, perhaps better, but definitely greater.

So what are they? And more importantly, what should be we be doing about them?

Point 1 – Ensure pressure is kept on the project win teams

Sales is often decried in construction; it is deemed to be a dirty word. Construction people don’t get their hands mucky with sales; they “procure” work. It’s not “sales”; it’s a “procurement process”.

You can be assured however that it is sales and the minute that order books start to burgeon sales staff can have a tendency towards the leisurely lifestyle. And we hear:

”I’ve already hit my half-year target and it’s only the 15th January!”

“Market forecasts are on the up – we don’t need to sell; we can order-take!”

“Our customers think we’re brilliant – they’ll be back!”

“Where else can they go?”

These comments are all too familiar and all too real. Rest assured I know; I’ve been there! I've heard them.

It is crucial that the pressure is kept on sales staff to procure as much profitable work as they can, but they must also sow the seeds for a future which may not be so rosy.

And that leads us to

Point 2 – Customer care

Customer care has to move up the ladder of priorities to the very top if it is not there already.

Know your customer; service your customer; look after and nurture your customer; make yourself so indispensable to your customer that he or she feels that you and you alone can solve their problems.

Know their desires. Accommodate their needs.

Apply the marketing adage – AIDA

A is for Attention,

I is for Interest,

D is for Desire,

A is for Action.

Attract your customers’ attention; move that attention to Interest; encourage that attention to grow to Desire. Allow that desire to become an Action by the customer, i.e. either a telephone call, an e-mail or letter with a project enquiry.  

Coming out of recession means increased customer care.

Point 3 Don’t underestimate the competition and what they have been targeted to achieve by their management

Just because you feel bullish don’t be sucked into the cesspit of unilateral optimism. If you feel the market has improved then you can bet that your competitors will be thinking the same and there is nothing more dangerous than a bullish competitor!

He becomes headstrong. His risk-averseness reduces. He becomes a totally different animal.

During recession the market is at rock-bottom; prices are on the floor; margins are tight; profits are non-existent; in other words, in competitive terms, it is a level playing field.

When the playing field is level, price is king.

Only when the playing field starts to slope a bit does the ability to win work by value-engineering, enhanced purchasing strategies, and good customer relationships improve.

Coming out of recession brings a hungrier, more vigorous, more ruthless competitor into play.

Point 4 Ensure that you keep your competitors busy

It goes without saying that you need to ensure that your own organisation is busy.

It does however sound bizarre that you should ensure that your competitors are busy as well!

Why not just starve them of work; they’ll very quickly go to the wall.

That may be true but for every company that finds itself in this situation, two or three phoenixes rise from the ashes with lower overheads and a mission to recover.

The reason for keeping your competitors busy is simple; the only way to ensure stability in a market sector and to create the prospect of growth and margin enhancement is to have everybody in that sector busy…...regularly and consistently.


Because this ensures that resources are fully utilised and the consequential price reductions associated with underutilised plant, equipment and labour resources is eliminated.

So in short:

Keep the pressure on your sales staff, don’t underestimate the fervour of your competitors, keep your competitors busy and ensure, above all else, that you treat your customers like gods. After that you will survive the great recession-busting process!

John Patch is a director of Roger Bullivant (Piling and Foundation Engineers) and of Posteritas (Environmental and Sustainable Building Consultants)