Crisis management: focus on core business

Considering today managers are facing lack of training regarding strategies to apply in time of crisis, the specialists interviewed by Business Standard are talking about cutting costs without affecting development, foregoing business lines when markets are falling, selecting clients using stricter criteria, and investing only in the core business.

The Country Managing Partner of the PricewaterhouseCoopers Romania financial service provider, Vasile Iuga, said that maintaining a good relation with lenders is very significant. He also stressed the importance of making operations more efficient by selling poor performing assets, or activity branches, and maintaining a good level of liquidity.

“At the same time, cutting cost measures must be integrated in sound strategies for optimizing profitability, strategies that must not lose sight of good risk management, such as, the risk of laying off talented people, or the risk of the impact of cost-cutting on the employees morale,” he added.The Managing Director of Raiffeisen Investment Romania, Ioana Filipescu focuses on a different type of risk. “In their chase to spare their liquidities, managers will have to be careful not to cut costs too much, and lay off massively those who provide for their existence tomorrow, because, undoubtedly, a time will come when economic growth revives,” Filipescu said.

The Managing Partner of SOAR Management and Investment, Valeriu Nistor, draws attention on the lack of communication between involved parties and speculating temptations.

The founder of the Bostina & Associates law firm, Doru Bostina, said that this first economic crisis of the Romanian system in the past 75 years has caught a great many company managers off guard.

The crisis hit the Romanian economy as of last year’s third quarter, when the country registered the highest growth rate in the European Union. From this perspective, Romania’s economy risks a hard landing. On the other hand, the measures that companies are forced to adopt now, as long as they are based on structured development and the long-term, can be a real opportunity for becoming more effective.

A specialist in executive search, George Butunoiu, describes a “crisis manager” as a very good analyst, a leader who inspires authority, and a strong personality. “In time of crisis, discipline is required,” Butunoiu said. The Chief Executive Officer (CEO) of Orkla Foods Romania, Manuela Banu, says the “crisis manager” has to handle stress well, act calmly and have a pragmatic approach.