Bulletin #2
November 20, 2008

Managing for Tomorrow
Jim Gehrlein

You reduced your direct labor force and trimmed the salaried indirect as well.  Everything else looks like ‘fixed costs’, right?  Now what?  Is there more we can do? 

Today and Tomorrow!
All businesses live and perform in two time periods: that of today and that of tomorrow. Tomorrow is being made today, irrevocably in most cases. Managers, therefore, always have to manage both today - the fundamentals - and tomorrow. In turbulent times, managers cannot assume that tomorrow will be an extension of today. On the contrary, they must manage for change; change can be an opportunity and a threat to the future of their business.

Lean and Mean…Fast and Opportunistic  
In turbulent times the business has to be kept lean and mean, capable of taking strain but it also has to be capable of moving fast and availing itself of opportunity. Unless challenged, every organization, it tends to become slack, and easy going. Every business tends to avoid unpleasantness. And nothing is less pleasant and less popular than to concentrate resources on results, because it always means saying “no”. Companies need to control the assignment of its resources. It needs to think through where positive results are likely to be. It needs to know the performing and productive resources within itself, and especially the performing and productive people. Organized continuous disciplined efforts are needed to commit these resources to actual and potential results. “Feed the opportunities and starve the problems” is the rule and resources can be productive only if they are concentrated on positive results.

Strategy = Future
Finally, once a business knows its strengths it needs to base its future strategy on them. What do we do well? What are the areas in which we outperform the competition? Most businesses and public service institutions alike believe it possible to be a “leader” in every area. But strengths are always specific, always unique. One gets paid for strengths; one does not get paid for weaknesses. The question therefore is first: “What are our specific strengths? And then; are they the right strengths? Are they the strengths that fit the opportunities of tomorrow, or are they the strengths that fit those of yesterday? Are we deploying our strengths where the opportunities no longer are, or perhaps never where? What performance capacities do we have to add to exploit the changes, the opportunities, the turbulences of the environment- those created by demographics, by change in knowledge and technology, and by the changes in the economy?” Companies know what they do well and what they need to improve on in these turbulent times to pave the way for future successes.

Surviving or Thriving?
In my experience in banking, I found over the years that survivors of economic turbulence were guided by some plan. That plan could have been a budget with “what if” scenario’s and commentary on how the company would meet its projected goals for sales and income. One of the things that you, as a business leader, can do is to dust off that STRATEGIC PLAN and update it. I am sure most of you have some plan whether it is writing or in your head.  A successful business will have a game plan and, if followed and updated periodically as times and conditions change, will keep a company on course to survive whatever the conditions are that are facing them. Following a business plan allows a company to be proactive, not reactionary, to bumps in the road.  To thrive, not just survive, in these turbulent times we need to be proactive.  A successful business will continue its success more times than not with a STRATEGIC PLAN. 

Are you going to just SURVIVE or will you THRIVE?