Catalyst Strategic Consultants

How does your business need to grow?

This Means War!

ca4065d0-a094-4ddf-8bd9-871f61683109Cash Headed Down?

This Prescription is strong medicine for businesses caught in the growing impacts of our “made in Western Canada” recession.

Somehow, folks have to snap out of the trance. The trance that that everything’s OK.

It’s not. And it’s not going to be. Affected companies need to be put on a war footing.

I know, Presidents don’t want to go around projecting doom and gloom. Nor should they. But not having a plan to deal with the inevitable is just cavalier.

A plan in play now is what tuned in folks are up to.

It’s real. The drastic cuts in CAPEX are broad and universal. At end of January, Deborah Yedlin of the Herald counted $23B in cuts. Layoffs at the principal companies are mounting up and more large ones are coming soon. I’m hearing about this from very reliable sources. And the same source had 23,000 lost from the oil service rolls. These losses to the work force are the consumers with discretionary spending at their command. And the survivors are justifiably nervous.

Oil service contracts are in spasm. One factor still lulling folks is that we are still running on momentum. Contracts that were let last year are still paying out. There won’t be a lot where those came from.

Not to say that well-capitalized prudent companies are not able to continue investing. But it will be muted. And the others – the less well prepared, the ones with the shaggy balance sheets or the unhedged sales – are in panic.

Portraying this as media hype is just a defence against confronting reality. It is taking place. Netbacks to the industry – our core industry in the West – have dropped precipitously.

For those wishing to put a good spin on might look at this:

No one knows how long we’ll be crossing this valley. but it won’t be over soon – it may be a couple of years before the oil price really turns up.

A number of businesses I work with have had records in January and February. Those same entities are projecting downward in major retail by 25% + for oncoming quarters.

Our Prescription for tough times is comprehensive.

One item out of 10: Cash is King – no – God.

If you’re aloft in a plane in trouble, the first overriding priority is fuel. Fuel you burned cannot be put back in the tank while flying. Every step you can take now to cut hard and early will be paid back in more air time while you find a safe landing spot.

The 10 step program is tough and comprehensive – and some steps are counter intuitive. It’s bare bones on the slide share, but I’m open to a call for explanation.

It has credibility. It was developed by a world wide turnaround resource and has saved the bacon of a few companies that needed it.

There will be some out of the resource or consumer dependent sectors who are scoffing. And there are large domains like agriculture for whom this oil price drop is a boon. Others are overjoyed at the availability of work force and the easing of real estate prices. More power to them.

But the rest …. Better to getting on that war footing now.

Doug Bouey
Catalyst Strategic Consultants Ltd.

Leave a Reply

Your email address will not be published. Required fields are marked *

What’s Our Business?

Bringing out the best in you, your company and your people.

Doug Bouey, President
Catalyst Strategic Consultants Ltd.

Calgary, AB // Phone: 403.777.1144


Past Posts