Is Austerity the New Norm?

Phil Gillard, General Manager, SolutionsPT

When the credit crisis of 2007-8 hit, there was a widespread view that the knock on effect outside of the financial services industries would be devastating and clearly the growth which we were seeing in manufacturing did stall. During a discussion with the leaders of some local companies last week, we were discussing the actual repercussions.

The overall view was that we have all learned how to operate in this environment, the three key points being:

• The disruption caused by the crisis was an opportunity to strengthen the engagement with our staff – by having a sensible conversations with our employees and working through the solutions together has created a higher level of employee engagement

• The crisis also allowed us to have a more direct conversation with our customers allowing us to understand how the reduction in capital spend could be translated into more compelling business cases for operational spending

• The opportunity to innovate using insight from all of our stakeholders with customers and employees being top of the list

So is this the new business norm? Some of the group I was talking to started their businesses post 'the crash' and so clearly this is all they have known and most of us (who have continued growing) are happy and confident in this environment, so austerity seems to be the new norm.

Is this a good thing? Well the degree of innovation and optimism can’t be bad, however is this sustainable in the long term, we only have to look to the Japanese economy for the downside.