| Mostly we are concerned with relatively low-stress situations where management wishes to drive faster growth, avoid possible constraints, or reverse declining performance. Sometimes, though, organizations find themselves in crisis, with resources and revenues in sharp decline and financial losses that are worsening so fast as to threaten their survival. Drastic action may be unavoidable – but what action? | |
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It seems Finance has taken over Strategy’s role in recent years (our fault, not theirs), and we know this can strangle a business. The CFO tells the CEO to keep operating margins up, so pushes down on R&D, marketing, training, and just about anything needed to develop. So we keep slogging along with little growth, just about keeping investors calm with decent ‘returns’.
At least this might keep business risk under control – right? Maybe not. If the business is squeezed so it only just about has enough people and revenue-spending to keep afloat - what happens if market conditions worsen, competition hots up, or some misfortune arises? Our top-line numbers suffer, and we have no slack whatever to respond. If the CFO is still in the driving seat, she or he will likely urge more cost-cutting, making matters still worse.
I hadn’t spotted this before – Finance-led strategy probably gives us the worst of both worlds!
| Resource attributes pose challenges for managers of non-commercial organizations, just as they do for business executives — clients, beneficiaries and other demand-side resources bring with them the service demands they place on the organization, staff bring skills and experience, and so on. What issue causes concern for many not-for-profit organizations? |
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