You should be keeping a watchful eye on all costs even in a strong market like todays.
Today’s post is by Dave Wenig, Vice President of Sales and Services at SafeSourcing, Inc.
There is no shortage of news stories that are designed to induce fear in the reader. Surely, it’s up to the reader to decide whether the articles are correct or just more clickbait. While a lot of what we see today falls into the clickbait category, there are still real risks that need to be monitored and managed.
One such headline that affects us all is a question that has gotten plenty of attention in the media recently. Will we see a recession in 2020 or not? I’m not even going to speculate. It’s not my place to do so. Instead, I’ll do my part to make sure that my customers are prepared for a recession or any other potentially devastating situation.
Are you too comfortable?
One of the biggest mistakes I see our prospects and a few customers making is allowing themselves to become too comfortable with their situation. Perhaps a strong economy has been good to them for some amount of time and they have shifted their focus away from cost reductions. Whether they did this intentionally or through negligence, they’ve made a critical mistake. Focusing solely on revenue is an incomplete strategy. It’s like keeping your car perfectly clean and shiny and skipping the maintenance like oil changes. At some point, you’re going to be in trouble.
I’ll admit that this seems dramatic, but the fact is I have personally seen this play out within some of the organizations that SafeSourcing has worked with over the years. I’ve watched companies embrace strategic sourcing, regardless of how weak or strong their sales are at the time, which thrive when the market is strong and survive when it is not. On the other hand, I’ve watched former customers and prospects go through layoffs, having their stock values crash, and shut their doors. At some point, it’s too late to cut costs. The time to be a steward of your organization’s expenses is before it is too late.
Don’t let yourself get too comfortable and caught off guard. Split your focus in a way that still allows for strategic sourcing to be an initiative and make sure the organization understands that this has executive sponsorship. Or don’t. I’ll keep my eye on the news and hope I don’t see more familiar company names in these saddening headlines.