Vital Tools to Prepare for a Recession

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15th Nov 2022

Multiple factors on National and International fronts have resulted in strengthening economic headwinds. Whether we will end up in a recession or a moderate downturn is unclear, however, all experts are united on one theme, we are in for challenging times in the short term and possibly even the midterm.

The cost-of-living crisis, spiraling inflation, and the war in Ukraine are all contributing to global uncertainty and it is clear that this means less money in the pocket of the consumer and less money for governments to invest. Some countries have faired better than others, but there are challenges ahead.

It is only a matter of time before the reduction in spending power, both for individuals and national governments, starts to bite into demand for the goods and services that we as businesses produce.

It is essential that businesses start to prepare for this and ensure that they remain competitive and cost-conscious, not only through prudent management of their financial resources but also through ensuring that every opportunity is taken to ensure that they remain competitive and stand out in the marketplace. Failure to do so will mean being left behind or total business failure.

Businesses will find themselves having to compete more aggressively to survive and maintain market share, never mind achieving expansion and growth. This may mean working to attract new clients or tendering for contracts for the first time, as well as fending off competitors seeking to survive and grow their market share.

Achieving certification to ISO standards is one of the best ways to prepare for the challenges ahead and to build a platform for survival and growth. Having traded through several recessions at this stage, our experience has shown that demand for ISO certification grows during recessions or downturns.

The main reason behind this would appear to be that businesses seek to gain certification to remain competitive and in an effort to differentiate themselves from their competitors.

Public sector tenders in particular are increasingly demanding certification to ISO standards as a core qualification criteria. This means that failure to prove that the business has certification will result in elimination from the tender process. ISO certification is also increasingly becoming a requirement within private sector procurement, as larger businesses seek to manage their supply chain risk by requiring members of that supply chain to have ISO certification.

Research by the International Organisation for Standardisation shows that implementation of ISO standards results in very tangible benefits and contributes significantly to economic growth. These benefits include:

–  Streamlining and improving the efficiency of internal operations

–  Acting as an enabler for innovation and a solid base for scaling

–  Creating the ability to enter new markets

Source ISO – Economic Benefits of Standards 2014

Standards are thought to contribute to economic growth by serving as a component of total factor productivity (TFP). Standards contribute to the overall “knowledge stock” in an economy, and therefore improve the efficiency of the use of capital, labor, or both.

Standards also have impacts on other outcomes that are directly related to economic productivity, such as international trade and innovation. In 2021, ISO released results from its survey on Management System Standards Certifications 2021 and reported an increase of 10% in ISO 9001 Quality Management Certifications, a 13% increase in ISO 14001 Environmental Management Certifications, and a 48% increase in ISO 45001 Health and Safety Management Certifications. Source: ISO Survey of certifications to management system standards

There is a wide range of ISO standards including; ISO9001 (Quality Management), ISO14001 (Environmental Management), ISO45001 (Health and Safety Management), ISO27001 (Information Security Management), and ISO22301 (Business Continuity Management).

ISO Standards are internationally recognised standards, which set out guidelines to ensure organisations are following the same process, resulting in a safer and more consistent result that will benefit both your organisation and the client or end user.

Organisations throughout many industries, in both the public and private sectors use ISO standards within their organisation and participate in standards development. Few of them see achieving and maintaining certification as a core part of their business strategy. Some organisations see ISO standards as being massively impactful on their performance and day-to-day activities and many of them realise the benefits ISO standards bring to their organisation.

There are some organisations that only make minimal use of their ISO standard or do not use them at all. Many organisations see implementing an ISO standard as costly or an obligation that could have a negative impact on the company dynamic.

These organisations have not considered the potential contribution that standards can bring to their organisational activity. ISO standards can help achieve growth, not only within your organisation, but also in the economy. As well as enhancing organisational efficiency, boosting trade, and facilitating innovation.

Standards such as ISO 9001 set out the criteria for a quality management system and focuses on principles including a strong customer focus, the motivation and implication of the top management within an organisation, the process approach, and continual improvement. Not only will ISO 9001 enable your internal processes to be standardised but will also enable you to monitor and check the effectiveness and identify when the standard isn’t not properly applied.

The most common reason for certification is that it is often a prerequisite in tender selection criteria, and it is quite often this which drives organisations to implement ISO 9001. Therefore making them comparable with their competitors who may already have certification to the quality standard. Having a positive reputation and good personal relationships are no longer enough to guarantee contract retention.

ISO 22301 may also be beneficial when crises such as a recession strike. With many businesses being part of organisational global supply chain, having an effective business continuity management system in place is vital. ISO 22301 helps to identify risks to their organisation and put in place controls to ensure minimal impact. It helps businesses have an initiative-taking approach in planning for the risk of disruptive incidents and enabling rapid operational recovery.

Having an effective Business Continuity Management System (BCMS) in place will improve customer trust and confidence in your organisation and will provide a unique selling point and market differentiator.

There are many other ISO standards that can help organisations through the recession, all ISO Standards can help to improve internal processes, increase competitive advantage, has employees in mind, and increases consistency and efficiency. Is it time for your organisation to consider ISO?