As we navigate these uncertain times, many franchisors become paralyzed with uncertainty. The COVID-19 outbreak has put a pause to routine life around the globe. As with any tough economic situation there is always opportunity hidden just beneath the surface, those that are well prepared will not only weather the storm, they’ll come out far ahead of their competitors.
If we look back to our last major economic crisis in 2009, clear takeaways can be seen regarding organizations that thrived vs. those that floundered.
A recent report by Bain & Company focused on the behaviors and decisions during that recession, which had the largest impact on post-recession performance. Crunching the numbers, the results are amazing:
Entering into the 2008-2009 recession, performance between the two once even groups sharply contrasted. Across almost 4,000 different companies the “winners” grew at a roughly 20% compound annual growth rate, compared with 0% among the “losers”. Those “winners” also saw growth of over 12% each year following while the others stagnated at around 1%
So how did they do it?
The “winning” companies took deliberate action, early, to capture opportunities in the areas of calculated cost reduction, talent top-grading, and pursuing an aggressive M&A strategy.
Calculated Cost Reduction
At the heart of a strong cost cutting strategy lays a plan to re-align business objectives and focus on the core business. Instead of slashing across the board, top franchisors learn to reduce redundant expenses, consolidate product offerings, and reinvest those savings into the areas of the business that drive growth including Marketing, Sales and Franchise Development.
Top-Grading Talent
As many franchisors panic and rush to reduce their workforce across the board, key industry performers will become available. The well-prepared franchisors will remain calm and look for the underlying opportunity to onboard these top performers, who may not have been previously available to you. It’s important to snag these individuals quickly, as they won’t be on the market for long.
Additionally, in uncertain times you’re at an advantage regarding the compensation packages required to attract and land these individuals. Consider partnering with a specialized franchise executive search firm to get these individuals in front of you quickly.
Aggressive M&A Strategy:
Well positioned franchisors should keep abreast of opportunities to acquire competitive or other congruent brands that will add value to their profile during an economic downturn. Tougher economic times allow for the acquisition of these organizations at a lower cost and can enhance your business capabilities, increase market share, and open you up to new markets with zero lag time.
Serving The Franchise Community: Franchisors who are concerned about navigating their brand through the economic downturn can apply for a complementary strategy session HERE.
ABOUT GLOBAL TALENT SOLUTIONS (GTS)
Founded in 2006, Global Talent Solutions (GTS) is the premier executive search, recruitment and talent acquisition partner to the franchise industry. With a systematic, candidate-centric approach to talent acquisition, GTS is able to identify, attract, and connect franchisors with top franchise talent.
To learn more about GTS, visit www.gtsrecruiters.com.
