Industry Cycles
Fortunately I had opportunity to work in multiple sectors. Everything so different at the same everything almost same, People management, Channel management, Leadership traits, cash flow Management, macro policies.
Look at Hydrocarbon retail cycle & look at Real Estate Sales Cycle (or Automobile Sales cycle, next article)
Hydrocarbon |
Channel Partners behaving like King, Sales Officers behaving like Privileged one. Channel Partners not managing finances well as other avenues of making money. Local interferences, doesn’t allow good practices also. New channel partner end up like old one. Few organisations wakes up & start handholding channel partners. Teaching them new values & processes if they want to survive. Massive investment to fight with new players, new ways of calculating IRRs.
Senior Sales Resources in leadership position even at District level, competition heats up younger generation replaces old guards within no time. Old guards not able to take pressure, not able to adjust, many places starts reporting to younger generation of Sales officers. Few not able to adjust to the new change, resigns or health deteriorates.
Govt starts privatisation process, but due to Govt change at Center, the process stalls. VRS gets implemented to trim manpower.
Private sector brings in people from Shoppers stop to insurance to other sector to bring new thoughts & processes. Traditional companies reduce average age of Sales team as they are more agile & receptive to new ways. Private players finds loopholes & tries to capture market share by unethically ethical way.
Suddenly comes high crude price cycle with non-supportive, populist Govt. Organisations starts bleeding. Private competition disappears, giving breathing time to recover & improvise processes. Massive layoff by private sector. No-salary revision on time, cut on budgets/expenses. Stop of work at many sites, bill payment delay. Rigid system to slow cash burn.
Sales team starts resigning & starts looking at other industries or higher study breaks.
Cycle changes to reasonable crude pricing, better finances, better processes, decent competition, seemingly better Govt for sector.
All these changed the way industry used to operate in a positive way by some difficult corrections in people behaviour & processes improvements.
Still, due to other financial challenges, Govt starts ball rolling for privatisation of public sector. At the same time, it seems that again newly formed local state Govt will not support this initiative. So many ups & downs every few year for this 125 years old sector, Like from Burmah Shell to BPCL.
Real Estate | Small organisations, Sales driven by very small team or loyal old guards or family members only. Few of the players try to disrupt market. Finds loopholes in system, tries to grow very fast with easy money available. People or institutions with money behaving like God not King. All stake holders except customer behave like Priviledge one.
Developers not managing finances well due to multiple reasons from capabilities or wrong judgements. Local interferences, doesn’t allow good practices also. New developers end up like old one.
Sales team getting built by attracting talent from other industries, insurance, telecom.
Prices of real estate going up every few years making this perpetual trusted cycle.
There comes a downturn, prices remain stagnant, sales stalls, finance dries up, inflation eats margins, all costs starts going up. Salaries cut starts, salary delay, retrenchment, pending bills, stop of work.
So if we look at Hydrocarbon, automobile or Real estate, the pain period of real estate may be getting over but will leave massive corrections this time on how industry operates. Are we going towards, 5-10 major player in industry kind of situation like automobile or hydrocarbon, let’s wait & watch.