Seven Ways Forward from Booz & Co’s strategy+business on, with specifics for Manufacturing, Consumer Products, Aerospace and Defense, Telecom, Finance, and general guidance on rebuilding capabilities for long-term growth.

Surviving the Downturn: Lessons from Emerging Markets from Sloan Mgmt Review [title self-explanatory]

Three Opportunities to Seize in the Downturn a blog post from Harvard Business Publishing [HBP] makes the case for two points I’ve raised before [a] that there’s cheap talent on the market right now, and [b] there are cheap opportunities to acquire key assets or entire businesses … which leads to the 3rd point, that there will be new winners and losers out of all this.

How Recessions Shake Up Industries in the Daily Stat from HBP [their link takes you to a different article] reports studies from McKinsey and BCG on how industry leaders fall and new leaders emerge in downturns – a reminder for your strategy to be intentional and targeted about challenging specific existing and new rivals, not just trying in some vague way to do better than others [a shortpiece on this at the end of chapter 5 in my book].

Timing Strategic Moves in the McKinsey Quarterly explains how scenario approaches can help avoid moving too soon or too late in these uncertain times. It’s rather focused on macro-economic and stock-market indicators, rather than [I'd prefer a more assertive stance be taken - choosing what to do and when in order to make the future play out as you want, rather than the passive response implied if not actually stated in this.]

Strategic Planning: Three Tips for 2009 from McKinsey Quarterly explains the value of scenario-based planning, the need to intensify monitoring to detect how the recovery is changing things, and the need I have emphasised to look beyond the crisis. [Shame most firms were not doing enough monitoring before the recession!]

Also some good content in Taking Advantage of Tumultuous Times from Monitor.

As usually implemented  …
- there is no coverage of competitive conditions or competitor behaviour – nor can I find any suggestion in the BSC or Strategy Maps books that they should do so.
- there is no coverage of overall supply/demand conditions – and again, no suggestion they should do so.
- there is no attention to prospective performance – i.e. how we are likely to perform on key indicators in coming periods [as distinct from our performance targets].
More seriously, although the causal logic generally seems to make sense to executives [Learning/Growth >> Internal Processes >> Customer Consequences >> Financial Outcomes] there is no rigorous, formal, verifiable structure to that logic – i.e. no solid ‘theory’ – that might ensure the strategy map is robust. Consequently, BSCs seem to reflect what teams think, or would like, some of the causal relationships to be – which may be entirely different from what another team might come up with. [I address this issue and suggest the basics of a more rigorous approach in chapter 4 of my book .. see www.strategydynamics.com/c4 ]
As a result, I can’t as yet see how a company’s BSC could have led them to anticipate the current crisis, to plan for it, or to work out what to do to survive and escape from it. It would be extremely valuable for many of us to hear of cases where BSC has been helpful in coping with current difficulties, and how that has happened.
Kim

An alternative view is that executives were mostly doing things they thought – but incorrectly – to be in the best interests of their organizations and their customers [as well as themselves of course].  This hypothesis is supported by the endless positive assessments of corporate prospects by analysts and other well-informed commentators, right up to the moment things went wrong. Surely all those hundreds and thousands of executives could not have hidden dishonest or deceitful behaviour from the outside world for so long?

If they were not being dishonest or unethical, then, were they in fact being insufficiently competent in the strategic management of their organizations. Government grilling of banking executives, for example, has shown that CEOs were doing things that were widely regarded as skilful, even super-clever, that neither they nor most others realised were dumb until after the event. And the banks were not alone in managing themselves into crisis, or at least into serious trouble – we now have car makers, airlines, ship-building, commercial real-estate, retailers and hundreds of other sectors in difficulties they could and should have foreseen and guarded against.

The screen-cast you will find at http://www.strategydynamics.com/strategy-lessons came about because I had reason to reflect on this question for presentations at business schools in Argentina and Brazil over the last 2 weeks.

I asked for two ratings – Useful [no, a little, very] – and Dangerous [no, a little, very] – and allowed people to respond with both if they felt a suggestion was both potentially useful, but also came with dangers. Following are the most common views – with no initial prompting from me! Note that other views were justified in specific cases.

De-layer management

Useless and dangerous in most cases. Most felt it should only to be done in extreme crisis – like danger of bankruptcy.

Consolidate support functions

Possibly useful and not too dangerous, provided it did not distract management from other important tasks.

Redefine your business model

Useless in most cases and dangerous diversion from managing the business.

Save the core at the expense of the periphery

Very useful, and not too dangerous. With prompting, most felt their firms had over-expanded away from their core in the first place.

Buy up cheap assets – or whole businesses

Very useful and not dangerous if current business was not struggling too much.

Pick up good people who become available

Very useful and not dangerous. Most have found it tough to get the people they needed before the crisis, so see this as a great opportunity.

Keep going with all strategic initiatives

Could be useful but also dangerous … most thought they had way too many ‘strategic’ initiatives that should never have been started. Conflicted with the better advice above to focus on the core.

Full article at Rethink Your Strategy: An Urgent Memo to the CEO.

Much of the advice is generic, and requires much more work than the brief headlines suggest. It also implies undoing much of the foolish activity that firms engaged in during the boom – by cutting fringe activities, shedding marginal businesses, conserving cash. [Where was the advice on these basic principles over the last 4 years?]

Then, as I’ve argued before, look for M&A and other opportunities to rationalise competition to your own advantage – see more on pushing out rivals from chapter 7 of my book.