Don't let response to oil price curb future growth

Speaking at a breakfast event hosted by the Aberdeen Chamber of Commerce today, Baker Tilly’s Dougie Graham warned businesses to avoid stifling future growth opportunities when responding to oil price volatility.

Warning delegates that short term efficiency exercises, such as headcount reduction or relocations, could be detrimental to businesses in the longer term and make growth much harder when prices start to pick up, Dougie said:

"While the price of Brent crude has risen slightly from its $45 low in January to around $65 today, this is still down by more than 40% from last June, and the prospect of prolonged low prices is putting unprecedented pressure on businesses dependent on the offshore sector. 

"Very often, company directors will be seeking reductions in staff costs or property overheads or considering new technologies as a means of improving efficiencies. However, such projects can sometimes be a false economy, leading to a loss of knowledge and experience, causing significant upheaval and imposing high costs and risks. Focusing on process improvement in the first instance carries a much lower risk, minimal outlay and provides the foundation for other necessary changes. 

"In my experience, companies can waste money on costly consultants to deliver large scale change programmes and significantly underestimate the benefits that an in-house process-driven efficiency programme can deliver. Technology and people and change management are important, but process improvement should be at the heart of efficiency and sustainable growth."

Other speakers at the ‘Change Driving Growth’ business breakfast included Ian Phillips, chief executive of the Oil and Gas Innovation Centre and Gareth Gilbert from The Fifth Business (Scotland) Ltd.