Growing Your Bottom Line in Recession

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Author: Dean Hunter

Published: 31st December 2015

Resilience was the word of 2015 amongst the oil and gas sector. It’s been hard to stay positive, stay focused and to consider growing the business when it’s felt for many like a daily battle of challenges and stresses.

So how as leaders do we work to continue to grow our businesses when everything around us seems so problematic?

There are two main ways to grow a business, one is to attract more sales from existing clients or new clients or to generate workload through M&A activity.

The other easier route we have is to become more effective, more productive, as a means of lowering that cost base – many of us have done little this year to tackle this one besides headcount reduction. In order to do things differently; we need to understand how we can do more with less, not a new concept but how can we really increase the bottom line with less staff and less workload?

In 2015, we talked a lot about engagement; that wasn’t a fad to be left behind – it will be even more important in 2016.

In 2016, we need to retain the team and work to ensure we have the fundamentals in place to grow the business:

So here are our Top 5 resolutions for CEO’s and business leaders in oil and gas in 2016.

  1. Be Engaged and have an engaged Leadership Team: How many of your team have delivered what you need in 2015? How many are you keeping close due to personal relationships.

You must have an engaged leadership team if you are going to succeed in 2016. In a recent study conducted by “Red Letter Days” (2015) it was discovered that around 69% of senior/functional managers were engaged.

What’s very worrying is that in the same results less than half (47%) of CEO’s were actually engaged. Who engages the CEO? When they have the bank, the shareholders and everyone else to keep happy who removes the frustrations for them? Typically many CEOs are tied in so they may remain with the business for the long term pay out but it doesn’t mean that they are engaged.

In this case it’s key but not ideal that their direct reports do the engaging. As business leaders we need to engage ourselves better to lead in bad times and not just good ones.

2. Engage your staff: If you take one of these away – take this one. Only 36% of staff in the UK are engaged, so fully productive. So nearly 70% of your office or offshore/onshore work site isn’t really driven to deliver the results you need – do you know which ones?

So perhaps performance management isn’t such a waste of time after all with that link to the bottom line. You can increase your profits by increasing your productivity.

If you are one of the companies that only has a third people of its team engaged and you are delivering to your customers you could still have synergies available.

3. Get the right organisational structure and roles in place. If you are going to remove those daily frustrations, the repetitive moans and groans, you are going to have to consider reshaping your company.

Your operating model i.e. ‘the way you work’ changes all the time so you should be looking at this every 18 months or so. Ensuring your people are accountable comes from having clear roles and responsibilities in place.

This is not the most exciting thing you will do in 2016 but it will make the business leaner and work better, which will aid profits.

4. Embed Values: Many find it hard to find a link between values and profit. Values drive behaviours, behaviours drive culture. If staff are engaged and happy they will deliver for customers; and customers will come back for more – this is very important in a market where most clients are trying to do the work themselves by removing the third party service provider.

A health warning though; profits are a positive outcome of having strong values, you cannot embed values solely to make profit – this will be identifiable and will just devalue the values and disengage the team.

5. Have a strategy – what will your game changers be in 2016? There will be enough resilience required in 2016 without stacking your strategy with nice to have’s and internal naval gazing. What could make a huge difference to the bottom line this year?

Can we bring work into the UK? Can we diversify at low cost? In these times staff don’t need silence they need security so where are you going and what are you going to do to make the business sustainable? We’ve moved away from 50 page business plans, a list of 6-10 game changers will work.

Communication of these and how people can help to deliver them is key.

We will see the oil price increase but who knows when, so let’s get as productive and profitable as possible so that when the good times roll we are built for growth and can benefit from the improvements we have made to the culture we work in.

So get ready for 2016!

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