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In the first article we looked at the cycle of the financial year and the cycle of the school year to explore how much this impacted the way your clients and their customers respond to sales and marketing activities.
In this article we will look at two longer running seasons: the economic cycle and the season of your life.
As a Portfolio Executive we have the privilege of having a variety of clients. We need to recognize that during the economic cycle, different kinds of business, and different kinds of services and products, will thrive and will struggle.
Typically, during the boom times, businesses will invest in sales, marketing, training, and leadership development. They’ll invest in new products and new markets. They will be open to taking higher risks and moving into longer-term contracts. They may engage interims, contractors and consultants.
In boom times asset-based businesses tend to thrive, because their assets have become more valuable and it makes more sense to invest in assets. Businesses that rely on discretionary spend tend to thrive, because there is more discretionary spend available e.g. hospitality, events, leisure and travel.
As the economic cycle starts to turn, there are two kinds of expenditure which get hit very, very quickly. Shifts were very dramatic in the crisis of 2008. I had a client doing digital advertisement production and orders ceased overnight.
Businesses cut down on training, reduce marketing and start to release contractors and consultants. If things get more difficult, they may withdraw from particular markets. They may restructure their leadership teams. They will certainly reduce or freeze recruitment and they may be willing to accept more staff turnover. These can have a huge impact on you as a Portfolio Executive, if you’re trying to get into new clients and your services relate to those particular activities.
As things get tighter, businesses may need tighter financial control and this can be a great opportunity for Finance Directors. They may also want to cut costs around their IT which for CIOs and CTOs is a double-edged sword. There’s less investment in new projects, but it may also be an opportunity to squeeze more value out of what they’ve got.
Some businesses may continue to thrive during a recession e.g, distressed or compliance based purchases e.g. insolvency, insurance, litigation, cybersecurity. Other businesses may have deep pockets and use the opportunity to take market share or acquire distressed competitors. It can be the best time to invest in new product development, up marketing spend, eat somebody else’s lunch, acquire valuable staff or businesses that are undervalued. If you are in sales, marketing, training or recruitment, you need to build a different kind of pitch. In operations, you build value by reducing costs and increasing efficiency.
So, what happens as you come out of the downturn? What are the opportunities then?
There are opportunities for recruitment and product innovation. It’s all about being adaptable and responsive to the new opportunities but doing it in a way that ensures that there’s a very rapid return on any investment so you’re maintaining profitability through that upturn.
Sector specific traits
But there’s another dimension to this and that is the sector dimension.
It’s worth recognising that different sectors respond differently to downturns.
So, luxury goods have traditionally been very resilient to downturns because often during a downturn the richer people actually get richer. Anything relating to the property market usually suffers very badly. Financial services and professional services often go through a huge wave of cost-cutting and get rid of lots of staff. This can be an opportunity for organizations that want to bring senior professionals in and help them to transition from their financial services skills into the businesses that are going to thrive. There are some perverse things that have happened in the post-Covid era where, despite lots of economic pressures, energy and commodity businesses have done very well.
So, keep an eye out for what’s going on, both to serve your clients and to make sure you’re making the most opportunities you’ve got in the market.
Economic cycles are here to stay and taking a view about impacts for you and your clients during difference economic seasons is essential.
Often, you’ll be working with people where the founders of those businesses have only seen one downturn before. And they’ll have people working with them who perhaps have never seen a deep long-term recession. You are bringing your skills, knowledge and experience, where you have experienced three, four, perhaps even more economic cycles and this makes you incredibly valuable to your clients. You need to position yourself as that trusted advisor who is with them through thick and thin and continue to demonstrate value every single month.
The Season of Your Life
The great opportunity of the Portfolio Executive workstyle is the ability to shape your workstyle to match your lifestyle needs. To take advantage of this you need to become more aware of the season of your life. Too often in corporate life you have been expected to perform in the same way whatever was happening in your personal or family life. Now you have new choices.
Here are some examples of evolving situations:
You thought things would get easier as the children became more independent in their teens. But their needs have just changed. Supporting their extra-curricular ambitions in sport, performing arts or the myriad of other possible activities require a raft of responsibilities outside school hours often as the ‘taxi of first resort’. No longer is a short burst of joint activity with a child the ‘quality time’ they need. Now the important conversations happen because you are not busy when they need you and you will not be able to plan it in advance. One of my portfolio executives has restructured their workstyle so they can support the ambitions of their teenage daughter to become an international Lacrosse player which requires him to be present for summer training camps in the USA. Another has created flexibility in their schedule so their child can become a candidate for the Royal Ballet.
The Empty Nester
Your children are leaving home, whether to university or into employment. Childcare responsibilities are over. (Until the grandchildren!). This can be an important time to renegotiate the roles and responsibilities at home. My wife and I have chosen to go into business together. Another client is building a share portfolio executive workstyle with their spouse.
Weddings and Grandchildren
One of my clients has taken the opportunity to use the flexibility of his Portfolio Executive workstyle to full participate in the weddings of each of his four children including three that involved an extended overseas stay. Now, his work anywhere, anytime workstyle has made it viable to buy a 2nd home in Shakespeare country so they can regularly be available for the children and grandchildren nearby. A number of my clients intentionally schedule a day a week to spend with their grandchildren.
Déjà vu All Over Again
A number of my clients whose first marriages broke down (sometimes due to the pressure of corporate life) have married again and have a 2nd family. Now they want to ensure they can be there in a different way for the new family as well as set aside the time to sustain their relationships with children from their first marriage. Flexible working and more availability are an important part of the mix.
Both my parents have been ill, hospitalised and died over the last few years. During this time, my youngest brother was diagnosed with cancer and had a rapid decline before his death at the beginning of the Covid pandemic. Like several of my clients, I valued the ability to reshape my commitments so as to be available and support close family during these important times.
For many of us, there comes a season when we are ready to reduce the pace. It doesn’t suit us to only have two settings: full on or full off. In this season, we may want to start the day later or finish the day earlier. Perhaps we choose to have more long weekends or extended holidays. A former colleague has had a number of health scares but at the age of 85 he still wants to do some work. He has transitioned from founder, CEO, chairman and serial entrepreneur. Now he is building a small portfolio of clients for whom he offers an hour or two of 1-2-1 support a month. With perhaps forty fee earning hours a month, he is still offering his seventy years of commercial experience to others, feeling valued and being rewarded.
Knowing the economic season and recognising the changing seasons of your personal life are both important aspects of engaging with the longer cycles that drive behaviour and create opportunities.
For any senior professional you ignore them at your peril.