MCA Report Highlights Action Needed to Help the Real Economy

Association says that many senior managers are ‘Downturn virgins’
The Management Consultancies Association (MCA) enters the debate about the UK’s economy today (22 October 2008) with a warning that changes in the economy and British business since the last recession now make it harder for companies and organisations to deal with this downturn.

These challenges are compounded by the fact that many senior managers in business and the public sector are ‘Downturn virgins’ – with no previous experience of sustained economic problems in their working lives.

The MCA says that the response to tougher economic times must focus on clear leadership, improved planning and a re-think of strategy. The Association’s report, Dealing with the Downturn, identifies ten critically important actions. It says that special and added attention will need to be paid to customers, suppliers and employees if companies are to survive the next few months and emerge stronger to take advantage of recovery when it comes.   
Alan Leaman, Chief Executive of the MCA, said:
“Carrying on as before is definitely not an option. Organisations today are more global and dependent on a complex network of suppliers. They also have higher levels of debt and less operational fat to cut in order to maintain their profitability. Customer expectations are higher and talented employees are more demanding. Senior executives now need to show that they can lead their organisations through the tough times as well as the good.”

Speaking about the MCA report, Ian Stewart, Director of Research at Deloitte, commented:
“It’s nonsense to say that you can talk your way into a recession. The economy is weak because the financial system is under great pressure and the price of oil has tripled, not because people are talking about these things.”

Chris Wakerley, Managing Director of Boxwood, added:
“There’s no point hammering suppliers on prices when the cost of their raw materials is rising. You have to treat them as partners. It’s hard work, but the financial benefits are enormous.”
Member firms of the MCA work with 90 companies in the FTSE 100. They advise and work with many parts of central and local government. Using the experience of its members, the MCA has identified the following ten critically important actions that managers should take:  

  1. Demonstrate leadership: Senior executives need to show they are worth the investment shareholders make in them by responding thoughtfully, not precipitously, to events and staying open-minded to new ideas and opportunity.
  2. Invest in planning:  Organisations have to improve their ability to plan and forecast so that they are better able to gauge the impact of economic changes.
  3. Re-think strategy: Re-evaluating their strategy and business model will help ensure organisations have the resilience, not only to cope with the harsh conditions of the short-term economic climate, but to prepare effectively for their future recovery.
  4. Focus: Decide which functions and initiatives to concentrate on, and which should be outsourced or stopped altogether.
  5. Seize the opportunities: Smart organisations will steal a march on a struggling competitor or acquire assets at low prices.
  6. Look after your customers: Consumers’ expectations do not change simply because they are spending less. Giving in to the temptation to cut quality or service only creates a hostage to fortune.
  7. Improve productivity: Cutting costs indiscriminately will only result in short-term gains and may damage an organisation’s ability to compete in the future.
  8. Look after your suppliers:  In today’s complex and interconnected business environment, organisations are far more dependent on their suppliers than ever before.  Forcing them to drive down their costs is short-sighted.
  9. Look after your employees:  The performance of an organisation typically rests on a small number of key people; these are just as likely to leave when times are bad because there will always be opportunities for them.
  10. Don’t expect the government to solve the problem: Good management, aided by an appropriate regulatory response, is the key to recovery.

For a copy of Dealing with the Downturn please contact Stephanie Henderson at or tel: 020 7321 3993.


For more information, please contact:

David Pippett
DWP Public Relations
Tel: 01225 833745 / Mobile: 07899 798197
Stephanie Henderson
Head of Communications
Management Consultancies Association
Tel: 020 7321 3993

About the Management Consultancies Association
The MCA was formed in 1956 to represent the consultancy industry to its clients, the media and government.  Management consultancy is an increasingly important industry for the UK economy with management consultancy revenues for 2007 estimated at around £8bn.  MCA members represent around 70% of the UK consulting sector, employ around 30,000 consultants and work with most of the FTSE100 and all government departments. Eight of the top ten UK-based consulting firms (by consulting fee income) are members.        

The MCA supports its member firms with a range of services including events, publications, interest groups and public relations. The Association also works with its members to attract the top talent into the industry. The MCA provides advice on the selection and use of management consultants and is the main source of data on the UK market.