From Stern+Associates: Managing perspective

Michael Alan Hamlin

Posted on March 31, 2009

Stern+Associates’ Danny Stern writes with some interesting observations: “Admittedly, the economic fundamentals of the United States are troubled, and if we could have the economy of 2007 back we’d take it. However, as we deal with the realities of 2009, it’s vital to develop a perspective on managing fear.

Michael Porter of Harvard Business School made a telling observation about the U.S. economy – it is larger than all of Europe’s and ten times the size of Japan’s. China’s economy, often portrayed as the economic powerhouse of the 21st century, is also 1/10th the size of ours. We shouldn’t act like we live in a country where work isn’t getting done, deals aren’t being made and value isn’t being created.

Scott Anthony, president of innovation consulting firm, is about to publish The Silver Lining, a book about using downturns to create real value in business. He notes that downturns are the best time for innovators to tilt at the windmills of business. When times are good, leaders willing to invest in fundamental change are scarce. When times are tough, innovations that can completely change cost structure are easier to sell, not harder.

Professor Porter in his CNBC interview put forward an affirmative agenda for every business leader:

  1. Stay positive and unite your company to achieve something hard. Don’t just cut – find where to grow and how to pursue it.
  2. Refocus on strategy. Determine what is different about your business and what is going to be your engine of growth.
  3. Get ready for discontinuity. Nothing will be predictable in the short term – there will be deals you couldn’t get done in a growth economy that can happen now. Be ready for anything.
“To take advantage of the great advice from these two renowned business strategists, companies need to communicate – strategically and consistently – what they are trying to achieve, in order to secure resources to make investments, reassure investors and business partners, and engage employees in efforts to fight through the downturn and emerge stronger

“Make no mistake: this advice is news because it is hard. Not every company will be able to find the proper focus to undertake innovative growth strategies and not all of those initiatives will succeed. Therefore, the spoils of success will accrue disproportionately to the companies that embrace these agendas the most aggressively. In good times and bad, communications is a multiplier of what companies do well and a mitigating agent for setbacks. Being consistent, visible, affirmative and nimble in this market is itself a sign to all of a company’s stakeholders that management understands how to build long-term success.

“As Scott Anthony argues in The Silver Lining, this is exactly the time to roll out new technology, look at innovations that would disrupt your own business model, and set the stage for the next era of growth. Doing any of that in the dark wastes much of the effort because confidence is as contagious as fear, success can dominate headlines as easily as failure, and setting a faster pace inspires everyone in the race to run faster.”

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