Thriving under adversity
Some useful tips in this article from BCG, some simple, some complex [and some over-complicated by trying to force them into a 'evolution' analogy]. Especially good to see its focus on exploiting opportunity, and good not to see some of the bad or dangerous ideas I have mentioned previously.
Do take care, though – few are universally applicable, so you will need to assess how appropriate each is to your specific situation.
The balanced scorecard
A large Management Development community I track has been discussing how we could have prepared people better for the current troubles, and some have advocated the Balanced Scorecard [BSC]. I have used BSC in strategy teaching for some years, and come across BSCs in many companies. My impression is that, whilst it is a valuable extension to standard financial reporting systems, it has some limitations as a tool for managing strategy – limitations that the down-turn has exposed quite sharply.
‘Gestures’, not strategy
It’s hard enough dealing with current difficulties in a strategically sound way, but it’s not helped by actions that are pointless or counter-productive – examples below.
Some of these actions just might be unavoidable if the business is in real danger of collapse, but very few are in such a bad state. It seems most are doing these things for purely symbolic reasons – ‘We must be seen to be taking the problem seriously’ – or else to hold up short-term profitability because of perceived pressure from investors or analysts. Read more
The crisis – ethics or competence?
See http://www.strategydynamics.com/strategy-lessons. Background follows … Read more
Aims – growth, survival …
I made a strong case in a previous post that strategy research should have been asking how strong firms grow cash flows, not deliver profit ratios. I had two main push-backs – 1. is growth relevant in present conditions? – 2. survival is really all that matters. Read more
How firms are coping
Mixed news from a recent S+B survey of execs. 75% say they do not need extra financial support – as I suspected – though that may change of course. More worrying is that most seem not to be taking the correct actions, given their specific situations. Read more
Good & bad downturn advice
I have commented on some of the consultants’ and journals’ advice in earlier posts, so thought I would share what some senior execs think who I’ve been asking in recent events. Here’s just a few … Read more
Chuck the consultants?
Have come across a few examples of companies cancelling all consultancy projects in response to the downturn. Now while this may be unavoidable in real crisis cases, it’s not a universally good idea. Read more
Decline and recovery by sector
Experienced execs may have a good feel for how their particular industry may evolve during the downturn and recovery – e.g. consumer sectors tend to fall first, but recover earlier also. McKinsey have mapped the decline and recovery of different sectors in previous recessions, which might give useful pointers for what to look out for in your industry so your strategy can respond at the right time.
Strategy in cyclical industries
The world’s biggest basic materials firms are suffering along with others as the world economy collapses, and the Economist points out that taking on loads of debt to grow and acquire others did not help. But these industries have always suffered cyclicality, even when not buffeted by extreme market conditions. Pity is that we have known how to steer away from these dangers for many years. Seems to me the same principles would have been useful to a great many other firms over the last 5-6 years. Here’s the essentials and an article that explains more … Read more