Recession hitting your sales? Then do “an Ollila”

My all-time business hero is Jorma Ollila, the Finn who took over Nokia and completely reinvented the firm. When Ollila became chief executive in 1992 Nokia was mess. It manufactured televisions and car tyres, and had a huge wood-pulping division. Ollila declared the future lay with mobile phones and utterly transformed Nokia. All non-mobile divisions were shut down or sold.

By the end of the decade Nokia was Europe’s most valuable firm.

I believe all entrepreneurs should ask themselves: “Can I do an Ollila?” If you make bicycles, perhaps you’d be better off switching to roller-skates. Or electric cars.

Restaurateur Sam Hurst is doing just that. Hurst founded the roast-meat-sandwich chain, Grazing, three years ago. But his initial concept isn’t working too well. The recession hammered sales and his five-year-plan to be the new Pret a Manger has since been dumped in the circular filing cabinet.

So he’s decided to “do an Ollila”.

In his own words: “Oh, god, my initial plans were hopelessly, wildly optimistic. We thought we’d be opening a Grazing by every Starbucks up and down the country. The recession hit us hard. Sales went down for 18 months. Fortunately we’ve discovered a new sales channel – office delivery. It wasn’t anything we planned. We got a few requests for deliveries and these have grown organically. We actually did no marketing at all. No fliers. No advertising. It just grew without us trying. I realised we needed to seize the opportunity. If we could grow the delivery business without marketing, just imagine what we could do if we really focussed on it.”

Hurst is essentially relaunching Grazing as an online-booking and delivery service. Same product. Different approach.

“We are taking a huge gamble with office delivery. We’ve invested tens of thousands in a new kitchen. Our overheads have doubled without growing revenues. We’ve spent money on an amazing website to take orders. Now its time to deliver! With the restaurant it took 18 months to break even. I don’t have 18 months of cash for this new project. I have three months. Which is tight! But I am really confident we can do it.”

It’s a gutsy move, no question. Fortunately his investors are backing him. As he says: “It’s a great opportunity to grow sales at a time when business conditions are dreadful. We’d be crazy not to do it.”

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