| Business people in the service sector received | | | | what is possible with turning accepted business |
| additional confirmation of what they have suspected | | | | thinking on its head. |
| for some time to be unfolding in Ireland: services are | | | | Etihad Airways, the national airline of the United Arab |
| being hit hard as all but the most essential purchases | | | | Emirates, seems at first glance to be an unlikely |
| are pared back by consumers and businesses alike. | | | | sponsor of the All-Ireland hurling championships. After |
| The NCB Purchasing Manager's Index (where the | | | | all, what does an Arab airline have to do with Croke |
| baseline value is 50) dropped to a low of 36.1 in | | | | Park in September? Many observers scratched their |
| October; it has now shrunk for nine months on the | | | | heads - with aviation arguable the most ruthless |
| trot. Bottom-line indicators on new work levels, | | | | industry out there, one that burns cash incredibly |
| staffing and pipeline activity are all continuing to | | | | quickly, any below-the-line advertising budget must |
| splutter. | | | | surely be quickly convertible to air tickets bought. |
| The first response of most managers in these | | | | With the Irish market being so small as it is, and with |
| circumstances is to cut costs: staffing shrinks, and | | | | Aer Lingus abandoning its Dubai route due to |
| expenditure on marketing, advertising and | | | | unprofitability, it did not seem to make sense for |
| consultancy shrivels as companies try to get lean. If | | | | Etihad to tie itself in with the All-Ireland. Etihad did not |
| the economy doesn't pick up, additional rounds of | | | | explain the logic in the face of puzzled queries as to |
| cuts are made, as the company grimly hunkers | | | | why they were becoming a sponsor. The answer lies |
| down, adopts the hedgehog position to protect itself, | | | | surely in the size of the Irish diaspora in the US, and |
| and hopes it can survive the economic winter. | | | | the growth in the subscription sports television |
| In one way, this policy of self-preservation may be | | | | market there. Etihad presumably know that they will |
| seen to reflect a lack of timely business planning; as | | | | not enrich themselves on the Dublin route. But having |
| Donald Keough, the former president of Coca-Cola | | | | their name beamed into Irish bars from New York to |
| writes in 'The Ten Commandments for Business | | | | Chicago to Los Angeles helps to grow their business. |
| Failure', any company that doesn't keep a watchful | | | | The potential size of the Irish market for Etihad is |
| eye on staffing and non-core expenditure in times of | | | | worth looking at and research by David McWilliams is |
| plenty is likely to be ill-equipped for any pending | | | | useful here ( Irish Americans are the second-richest |
| heavy weather. | | | | ethnic group in the US. Arranging for the Irish |
| It is arguable that cutting all costs, the first response | | | | Compromise Rules team to fly to Australia on Etihad |
| of managers, is the first response precisely because | | | | is another piece of the jigsaw, with the |
| they learned it in Business Management 101: but this | | | | Australian-Irish diaspora, another wealthy and |
| does not automatically mean it is the right response. | | | | well-travelled group being the target this time. The |
| The Stanford business professor, Jeffrey Pfeffer, | | | | Etihad sponsorship deal now looks very cheap, very |
| writes about the value for pausing to reflect on one's | | | | timely, and very smart. |
| thinking. In his book entitled 'What Were They | | | | An example of counterintuitive thinking that is |
| Thinking? Unconventional Wisdom in Management', | | | | currently becoming accepted business wisdom is the |
| Pfeffer writes of the death spiral in business, where | | | | growth in free online versions of print newspapers. In |
| companies shrink the offerings they make available | | | | the summer of 2008, The Irish Times announced it |
| to the market through cutting staff, thus | | | | was moving to free online access, thus cutting off a |
| hamstringing them when trying to staff incoming | | | | cash supply it had through its subscription model. For |
| workloads, and less tangibly, stemming the flow of | | | | years, print industry commentators had warned that |
| new business ideas. In the first instance, the | | | | newspapers would be de-invented by the web, and |
| organisation may not be able to meet demand, or | | | | that giving away content online would further lessen |
| has remaining staff that are ill-equipped to assume | | | | the incentive for people to buy the paper copy, |
| the responsibilities left vacant by the staff made | | | | pushing advertising revenue down, which in turn |
| redundant. In the second instance, organisations | | | | would hurt the quality of the journalism as staff and |
| should consider whether or not the people left behind | | | | budgets get chopped. So is a free online content |
| after a round of redundancies are the team that can | | | | business model for newspapers a simple case of |
| help them to survive the recession, then to deliver | | | | turkeys voting for Christmas? There is no other way: |
| strong results in the resulting upswing (economists | | | | newspapers have realised that web technologies, |
| make many column inches out of the collective | | | | both software and hardware, have made |
| amnesia around the fact that business cycles exist). | | | | newspapers ubiquitous. Advertisers know they can |
| Organisations should continually question whether | | | | hit Irish readers abroad, either on holiday or as |
| those who choose not to leave do so in fact | | | | emigrants, let alone as the indigenous Irish surf the |
| because they do not rate their chances of | | | | web whilst (or instead of) working. The Irish Times |
| succeeding out there, and whether those who | | | | loses money in the short term by binning the |
| willingly leave are in fact their best talent, confident in | | | | subscription model, but gains in tapping into the |
| the knowledge that their skills will be rewarded | | | | 'always on' wired market. This, though, is not |
| elsewhere. | | | | particularly ingenious on the part of The Irish Times - |
| Business psychology research is moving more now to | | | | in the UK, The Guardian has long set the standard |
| look at the thought processes individual managers | | | | with what can be done with free online business |
| and companies go through when evaluating their | | | | models, both in terms of the content spawned and |
| strategic options. The number, type and form of the | | | | the revenue earned. |
| choices are not 'givens', but instead vary according to | | | | Being both able and willing to recognise that the |
| the thinking style of the manager, or the culture of | | | | long-term view has to be different to the short-term |
| the organisation. The lesson from Keough and Pfeffer | | | | view is a difficult thing to always bear in mind, but |
| is that sometimes doing the obvious thing is doing | | | | businesses forget it at their peril. Embracing swingeing |
| the wrong thing. Copying what your rivals are doing is | | | | cost-cutting now may be right, but utterly harmful |
| not a considered strategy, it's an act of mimicry. | | | | for the future of the business. In working out what a |
| Conversely, counterintuitive thinking may contain the | | | | business has to do next, rotating all the options |
| solution, or at least a partial solution, to the business | | | | through all the angles is required. Not thinking is not |
| problem of besting the recession. Two Irish examples | | | | an option. |
| from different sectors - aviation and media - illustrate | | | | |