B P Collins spoke to Adrian Moorhouse MBE, Olympic gold medal winner; co-founder and MD of Lane4 – a management consultancy business. Adrian was voted Best Leader by the Sunday Times’ Best Small Companies to Work For and is listed as one of HR Magazine’s most influential thinkers.
B P Collins discussed what business lessons Adrian had learned from the 2008 recession that could be applied to the next one, after the UK’s economic output fell by 25% in May 2020, leading many experts to believe that the UK is facing the worst recession in over a 100 years.
B P Collins: How was your business doing before the recession hit in 2008?
Adrian: Before the 2008 recession, Lane4 was growing rapidly, both in the UK and internationally. Unlike this recession which came out of the blue, businesses did see signs that a recession was looming in 2007. As Lane4 was a new operator in international markets, it was difficult to grow the business when the recession was approaching, as potential clients remained with established brands, which they knew and trusted. So our costs outstripped our revenue pretty quickly.
In the UK we were doing okay during the recession because Lane4 was trusted and well known. The borderline profit we were making was able to fund the international offices, but we couldn’t do it for long and they had to close.
B P Collins: Did you have to change the focus on what services you were offering?
Adrian: It’s true in any climate, and even more so in a recession, that you have to offer what the market wants. A recession doesn’t mean that people aren’t spending any money. It means they’re spending less. So if they’re spending money on something – what are they spending it on? Once we know that, we have to stop offering products and services they don’t want and concentrate on what they do.
For example, our training services expanded during the last recession because clients demanded it. We had put a lot of people into product development and research department but when our new training and development service took off, we moved people over to address this need. Developing a new product which businesses wanted, was key during the last recession.
B P Collins: How did B P Collins help with those changes?
As B P Collins is a cross practice firm, we used both the corporate and commercial and employment practices. It wasn’t just a transactional relationship; they were a useful sounding board and we worked together as a team. Their wisdom and experience from working with other businesses was also helpful. Also, when one of Lane 4’s partners left the business during this time, B P Collins helped with their departure.
B P Collins: What lessons did you learn from the previous recession that you could apply now?
- Act quickly. Don’t prevaricate.
- Really check your products and services and find out whether they are what the market needs right now and offer at a price point that’s acceptable.
- Customer service is key in encouraging brand loyalty – care for your customers.
- Treat people kindly and with respect.
- You need to know your financial nuts and bolts. Get good financial advisors and work with people who can help you structure things differently.
- You have to be prepared to reorganise your business. It is difficult when you’ve planned your business to go in a certain direction but then your original vision is shaken. You have to be prepared to let go of things.
- You have to focus on what people want and a recession forces you to think that way. You have to let go of the products or services that are irrelevant.
B P Collins: Did the recession show up any weaknesses in your business?
Adrian: When you start a business, you kind of make it all up. Then you grow and work out where you have a stronger offering. When things are going well, it masks over things. We realised in the last recession that after we’d grown, the processes and systems that we had in place originally were not fit for purpose in a bigger organisation.
We had to reengineer the way we were doing things. At times we were quite bureaucratic, but when recession hit, we had to tighten everything up as there were less people and less revenue.
B P Collins: How did B P Collins help in your expansion?
Adrian: We’ve done quite a bit on shared ownership, hiring people and letting others leave. And as we’re a limited company there is quite a bit to do with that. It is essential to have a team of advisors that understand the story of the firm and B P Collins is very much a part of that.
To give a sports analogy, when I was a swimmer, I had a psychologist, nutritionist and coach. If they’d done their thing in isolation it wouldn’t have been very helpful if they didn’t know what the other advisors were doing. The same principle applies to Lane4. B P Collins’ lawyers speak to our HR and financial people.
B P Collins has proactive, strategic and forward-thinking teams, which do a lot more than simply help with transactions; and with that emotion and connection comes innovation. B P Collins is very much involved in Lane 4’s journey.
B P Collins: Lane 4 specialises in change management and training, why this important during a recession?
Adrian: Lane 4 is working with firms keen to reengage with their employees after furlough and help them connect with their customers again, as there will be many who feel disenfranchised and disconnected to what their company is doing whilst those who have been working throughout are possibly tired and fed up. In addition to this disparity, some employees will have to do different jobs when they return, if the business has had to restructure. We can help a team reform, be fit for purpose and emotionally connect with their place of work.
Fortuitously, we started a digital strategy a few years ago to help businesses manage digitally and virtually. If our digital products sell well, which we had to really develop and focus on during the pandemic, then this business could be bigger than the one we’ve got already. So there can be opportunities in a recession.
During lockdown we had to adapt and provide what people want. Although people are spending less in the recession, that figure is still trillions of pounds, so there is money to be made.