The UK economy is facing a perfect storm: above target inflation, the lingering impact of the pandemic, and the ongoing energy crisis. These headwinds, along with upcoming national Insurance (NI) changes, are forcing businesses to make tough choices. Many leaders are grappling with the need to cut costs while simultaneously maintaining the talent and agility to navigate uncertain times.
Laurence Frantzis, sat down with Alistair Hall, Independent Interim Executive & Advisor, to discuss how leaders can navigate storms on the horizon. Having been a professional Interim for 15 years and specialised in interim business leadership, Alistair is perfectly placed to discuss transformation and turnaround.
When thinking about options open to leaders facing strong head winds, Laurence explains, “Potential actions include supplier review/negotiation, margin increases, reviewing office requirements, and even reducing holiday days or implementing salary freezes,” he went on to say, “Ultimately, many businesses are considering headcount reductions as a primary means of cost control.”
This sentiment is echoed by Alistair, who highlighted the need for “much tighter cash control, CAPEX on hold, and recruitment freezes.” He emphasised the importance of “greater use of Interims,” suggesting that a more flexible workforce can help businesses adapt quickly to changing circumstances.
However, the pursuit of short-term cost savings can have unintended consequences. “Short-term decision making can lead to long-term pain,” Laurence warns. “We saw this in 2020 and 2021 when many companies over-streamlined, only to face severe skills shortages and wage inflation as the market rebounded.”
Alistair agrees, suggesting the potential pitfalls of becoming overly lean. “The cost of rehiring can be significant, and it takes time to rebuild lost expertise.” “Cutting to the bone may seem necessary in the short term, but it can ultimately hinder a company’s ability to operate effectively and achieve its long-term goals.”
So, how can leaders navigate this challenging landscape while ensuring they have the right talent in place?
Both Alistair and Laurence advocate for the strategic utilisation of Interim Executives.
“Interim Executives bring a wealth of experience and a fresh perspective,” says Laurence. “They can help businesses ‘declutter,’ focus on priorities, and improve operational efficiency. Moreover, they can enhance customer relationships and foster a more positive company culture, leading to improved employee retention.”
Alistair further emphasises the unique value proposition of Interim Executives. “They are the best in their field, having honed their skills across multiple organisations, ‘Special situations’ and regularly in ‘Business as Unusual’ environments.” “Interims bring a breadth of experience that is rarely found within a permanent workforce, combined with an often-inimitable level of strategic and operational ability and agility . They are focused on delivering tangible results, quickly and effectively. Importantly, the best ones know when to exit stage left, quietly and elegantly, and leave a lasting and positive impact on the organisations they help.”.
In conclusion, while cost-cutting measures may be necessary in the current economic climate, leaders must carefully consider the long-term implications of their decisions. By strategically leveraging the expertise of Interims, businesses can navigate these challenging times, maintain their competitive edge, and emerge stronger and more resilient