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In a Tough Economy...
Where Are Your Greatest MARKET Opportunities?
Countless opportunities beckon, despite the overall economic climate.
Some of the most urgent market needs include the following:
• Healthcare cost reduction and expanded access and distribution. Millions of Americans, and billions of individuals worldwide, do not receive basic medical care (which-- at the minimum-- would increase millions of employees’ and consumers’ abilities to contribute further productivity and sales to the economy). Merely throwing government money at the situation may or may not provide a solution. Efficient, focused business operations dedicated to cost reduction, quality assurance, and broad distribution to consumers is necessary.
• Energy that is clean, efficient, inexpensive, and independent of foreign oil. Electric vehicles offer promise, yet the questions remain where and how to generate sufficient electricity for safe, reasonably high-speed, long-range vehicles.
• Transportation. With US car makers in trouble, now may be the time to bring American public transportation systems up to European and Japanese standards. Further opportunities may be found in improved routing, logistics, and delivery services, including innovative (and profitable) internet-based systems.
• Opening new markets via improved transportation systems, both geographically and operationally.
• Building value-producing assets in underdeveloped areas domestically. While governments artificially (and temporarily) “spreading the wealth around” may not be a productive path, certainly innovative companies building wealth-developing and enabling products and systems is a classic “win-win”.
• Growing new markets. With approximately 1 billion people in the developed world, and 2 billion people in the rapidly developing nations of China and India, there are still another 3 billion people in the less developed world. Innovative organizations may find paths, even if slow ones, to organic and ultimately self-sustaining growth that will offer rich rewards for all involved.
• “Bargains” at high volume. Producers and suppliers who can maneuver into position to provide low-cost goods may realize above-average sales and profits as customers seek and take advantage of buying opportunities. Enabling products, not just stockpiled products, may have particular leverage.
• Web-enabled collaborative research in fields including science, medicine, geology / earth science, social sciences, economics, market research, and more. With today’s average teenager having access to greater computer power and communications technology than had the average CEO of 25 years ago, the wherewithal to streamline our markets and our economy is available.
Opportunities abound. Companies with initiative, adaptability, and organizational efficiency will generate success.
In This Economy...
What Are Your Greatest Internal ORGANIZATIONAL Opportunities?
Upgrading “ACCOUNTABILITY” to “PREVENTABILITY”
The current economic turmoil indicates just how calamitously inefficient our markets are, and clearly, companies too often do not act in even their own self-interest, let alone the interest of the greater economy and society. With the recent election of Barack Obama, there has been much discussion of increased “socialism”; however, there once was a government called the USSR that attempted to control nearly everything from Berlin to Havana, and that government failed almost completely. So evidently, although the private sector does not always respond appropriately, neither does the public sector! Yet for sustained-- and sustaining-- growth, someone needs to know what’s going on. Ultimately, it means we are all responsible, because we all lose when systems fail.
The doctrine of “Accountability” has held, simply, that when things go wrong, someone is available to blame. After a crash, however, blame provides little in the way of consolation or recovery. Thus, we must shift to a doctrine of “Preventability”, foreseeing and avoiding disasters. This means much greater attention to information, research, analysis, strategy, and collaboration.
One of the best (and worst) professional questions this writer has ever been asked is: “Strategy? Isn’t that just a lot of hot air from big shots?” To answer directly: “Yes, it is-- when it’s done wrong.” In recent years, preventable disasters abound:
• The dot-com crash of companies that had yet to determine their “path to profitability”;
• The telecom meltdown when finally it was realized widely that national infrastructures cannot be replaced every two years;
• The Enron, Worldcom, and host of other scams at that time all as old as human history itself;
• The credit crunch and real estate collapse of zero money down, all-interest mortgages in a self-propelled bubble that fewer and fewer consumers could afford.
Preventability means everyone is responsible for preventing a crash, just as everyone loses when crashes occurs. Organizations must ensure that everyone spends appropriate time and effort-- as little or as much as it takes-- to identify “red flags”, “connect the dots”, and establish viable, operational, counter-measures. It sounds cavalier, even heroic, to say “our organization takes risks”, and even “high risk, high reward”; however, not everyone who depends upon an organization and its services are in a position to play this game of Russian roulette. For these individuals, ignored and unmanaged risks are simply irresponsible. It’s easy for businesses to say “we don’t have time, and we can’t afford to evaluate that risk,” yet what organizations really can’t afford are the consequences that have devastated dozens of large, well-established and highly visible corporations over the past decade. Every American taxpayer now will foot the bill of the roughly $1 trillion bail-out, including other costs and losses, resulting from the recent crunch. We must ensure there is not another such crunch soon, because there just aren’t enough trillions of dollars to go around.
Preventability means taking the time regularly to check the “big picture” and make alignments as needed. It means checking and cross-checking the details, examining both sides of all interfaces, and playing out scenarios. A good chess player must prepare not only for a random or “typical” move by his opponent, but for the most devastating counter-move his opponent can unleash. “Hoping for the best, but preparing for the worst” may cover it. In contrast, expecting “business as usual” all the time is the sure way to fail on one bad day.
Perhaps independent audits or an update of Sarbanes-Oxley will include strategic risk management. Perhaps the market will begin asking these types of questions more commonly. Blindsiding the taxpayer and steamrolling others can work only so many times. Taxpayers generally were not aware that they themselves comprised the insurance policy held by Wall Street’s biggest and oldest firms. Ideally, business and economic crashes will be made as rare as plane crashes, via the same attention to detail, maintenance, and safety cross-checks. Going by “gut feel” (as business people love to do) is great, but clearly it’s not enough. There must be systems of cross-checks and double-checks in place as well.
Having personally led a successful initiative to safeguard a company from the impact of a crash in the then-high-flying satellite phone market, I would like to dedicate the California Institute of Strategic Management to the mission of helping clients in particular, and the global economy in general, to prevent or avoid disaster and maximize sustainable profits in value-adding and growth-building pursuits.
Will you and your organization join in this mission?
Sincerely yours,
Dan Steinberg, MBA, Six Sigma Black Belt
President
California Institute of Strategic Management ®