PERSPECTIVE
MARKET OPPORTUNITIES
PART 3 OF THE STATE OF THE BUILDING CONSTRUCTION INDUSTRY
PARKING THE
MONEY
ON CONSOLIDATION It is essential to once again concentrate on core strengths and pivot the portfolio, say V Sekhar Reddy V Sekhar Reddy is Managing Director, Lexzander and Rahul Duragkar is Managing Director, Emitech Group. Rahul Duragkar and They may be contacted at vscsreddy@lexzander.com and at rahul@emitechgroup.com, respectively.
e are not trying to sound dramatic, but the fact is that the world has changed forever. For a while, there are certain key elements that humankind has conveniently sidelined or ignored. Well, it is never late and always a better practice to inculcate the good habits of yore to arrive at a better tomorrow. It is essential to once again begin to concentrate on core strengths and pivot the portfolio. For that, it is important to learn to survive and prepare the mind for a relatively slow path back to recovery and growth. It is important to understand the new economic growth opportunities and, equally, to take customer-centric views. The wisdom lies in focusing on trust and loyalty – in-house and outwardly – and in placing the money on diversification. Okay, so how can we make the above happen? The first and foremost
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need is to set up a dedicated senior team in a war room setting. The dynamics would involve daily CEO informal updates, outlining macro-scenarii and translating to contingency plans, taking hard decisions, and mapping and modelling with time factor – days and not weeks. While structured and strategic leadership action is good, it is equally important to keep a tab on the work being carried out through tracking tools and an agile methodology. Overall, it is important to prepare the mind for setbacks, with no regrets for some of the decisions and actions. It is called fortifying the mind and not losing sight of the bigger picture.
SHORT-, MID- AND LONGTERM GOALS
The challenges ahead of us might seem formidable, and here, it helps to break the work and the expectations into short-, mid- and long-term goals.
IN THE SHORT TERM
Typically, the short-term goals would be to keep operations afloat for a period up to six months. For this, it is important to align the leadership, the senior team with a wake-up call. It is equally important to comprehend the true severity of the situation and the financial scenario. The road ahead is challenging. In the journey, it is essential to protect the health and safety of employees and customers. It is important to run macroeconomic scenarii and do a stress test of profit and loss. It is crucial to plan smart cost cuts to conserve cash, which would mean inducting a hiring freeze and keeping an eagle’s eye on capex, opex and working capital with the objective of optimising the approach. It is important to consider extreme downside scenarii, outline operational actions and conduct risk analysis.
