When Management matters
Accenture has just released a new report about management capabilities and when they really matter. The title of that reports says it all: „When Good Management Shows: Creating Value in an Uncertain Economy„
A lot has been written and achieved in the last couple of weeks to face the global financial crisis. Some are impacted more some less. Looking at the reasons most of the articles do talk about the financial systems and its weaknesses. How ever, some companies are cruising their ship very carefully through these troubled waters and are able gain vs. their competition, others have major issues in keeping the boat on course and others sink their boat.
Accenture is looking at it from a different angle.
Lets look at the summary first:
Good times mask poor corporate performance, but it is during downturns that excellent management distinguishes itself. Accenture conducted in-depth research to investigate the performance of companies during a previous recession and uses the findings to outline the characteristics that set high-performance businesses apart from their competitors.
The main message is about what companies have done in good times to sustain the bad ones plus how to get ahead of your competition in bad times by focusing on areas that really matter (eg. cutting the right costs, investing money in the right things). It also gives great examples by looking at specific companies to get an understanding ‚how‘ they have done it.
Another quote that targets at the same topic from one of the founders of Google, Sergey Brin, right after they announced some unexpected quaterly results where they raised the revenue by 26% and profit by 31%.
Google co-founder Sergey Brin predicted the company will emerge from the turmoil even stronger. „My favorite time to manage is during a bust,“ Brin said in a Thursday interview with The Associated Press. „It brings more clarity about what your customers need and what your priorities should be.“
Another way of identifying what areas you need to focus on and how to prioritize specific planned initiatives in your companies portfolio. If you are strong in good times and prepared your self to surrender the bad times you can gain a lot when others are suffering.
Another quote that supports this argument has been made by, Laura Wright, chief financial officer of the Dallas-based discount airline „Southwest Airlines“:
Southwest did not have significant exposure to the problems with the nation’s financial system.
…
Credit markets are certainly ugly right now, but we’re in a good position for these turbulent times.
…
Bottom Line, prepare yourself in the good times to face the bad.
the airline’s modest debt load, its $6 billion in cash reserves, and its fuel hedging program as reasons for its financial stability. Southwest also doesn’t have significant capital obligations coming up, having already accepted 26 of the 29 airplanes it currently plans to add to its fleet.
Bottom Line, prepare yourself in good times to successfully face the bad and this report might give you new ideas how to do that.
2 Comments
TJ,
Long time reader, first time blogger…. or something like that!
I’m enjoying the topics on the site and I see the newsletter’s coming along nicely.
We’re certainly entering interesting economic times and talk about the global economy is dominating how we think personally and professionally in so many ways at present. As your article points out, some people and companies will be looking at this time as an opportunity to be better than their competitors, where others will focus more on survival.
Personally, as a consultant in the IT recruitment market, I’m looking forward to working through this potential market downturn, as it presents an opportunity to re-focus on the key business priorities and drivers that will make you succeed and differentiate yourself from your competitors. Your article has also made me think about what fellow managers and project managers think about their job security and job opportunities in this uncertain time?
If we see a continual downturn in the job market as we have seen in the past 6 months, then we’ll see more competition for the good job opportunities, particularly in the contract market. With this in mind and also as you’ll want to be better than your competitors, there’s real value in having a positive and effective relationship with recruitment consultants.
When I first meet with people looking for work, the most common feedback I get is that the experience working with recruitment consultants has at times been very frustrating and of little value to them. If the market trend continues and finding good job opportunities becomes more competitive then I see that people’s frustrations will generally increase.
I’ve worked on both sides of the fence, as an IT professional and now as a recruitment consultant, and I’ve seen what can be done by both parties to make the relationship more rewarding and effective. This is something I’ll elaborate on if your readers would be interested.
Hi Daniel,
thanks for pointing that out. Very interesting thought and I will take you opportunity to elaborate on that further.
See article around this at
https://www.torstenkoerting.com/2008/10/21/frustration-in-downturn-of-job-market/
TJ