The world’s biggest basic materials firms are suffering along with others as the world economy collapses, and the Economist points out that taking on loads of debt to grow and acquire others did not help. But these industries have always suffered cyclicality, even when not buffeted by extreme market conditions. Pity is that we have known how to steer away from these dangers for many years. Seems to me the same principles would have been useful to a great many other firms over the last 5-6 years. Here’s the essentials and an article that explains more … Continue reading »
Dec 152008
More from McKinsey on this, including a review on some useful thinking from last time. Continue reading »
I realise I’ve focused on what McKinsey has had to say on the downturn, and especially on the failure to warn of the subprime nonsense, so thought I should check out the other big consulting firms. Not so easy, as they mostly don’t publish their own views quite so firmly or accessibly as happens with the McK Quarterly.
Why am I banging on about this? If those advisors had been urging caution when it was obvious trouble could be building, and their clients had listened and acted, then much of the over-commitment that made the boom-to-bust so serious would never have occurred. What, for example, would have happened had these firms all blown the whistle on the subprime bubble early in 2006? The world might have been a very different and happier place than it now is. So what did the consultants have to say on this and the impending downturn generally?
I’ve been posting on strategy in the downturn for a while now, but what makes me really angry is the strategic incompetence that led to this mess [search 'incompetence' for previous posts on this]. But now I’m puzzled – Harvard Business Review, McKinsey Quarterly, Strategy+Business, Economist, etc, etc, are full of advice from strategy experts on how to survive the problem, so I wondered how much they warned folk before that this was likely to happen? .. and how much advice they offered on how to make sure your organization would avoid trouble in the first place? Continue reading »
Dec 052008
I see Harvard Business Review has got out a section on ‘Unconventional Wisdom in a Downturn‘ from their team of bloggers. It offers some good pointers, but not all, so be careful! Continue reading »
Nice example of what looks like a strategically sound business [Lufthansa] pouncing on valuable resources shaken loose when a feeble competitor [Alitalia] stumbles. The Economist reports they will be offering new services to eight other European cities from under-served Milan. Continue reading »
Nov 232008
I’ve fumed about the strategic errors that have got so many firms into the mess in which they now find themselves, but I guess you might like some idea how to get out of a hole? I just gave a short session on one approach to this with a class of 50 senior execs, and was reminded about a project I did to help a company dig itself out of trouble last time round, after the 2001/02 debacle. No guarantees, but this simple article on ‘Strategic Recovery‘ may be helpful – [not to be confused with the other kind of 'recovery' that the accounting firms' insolvency practices are starting to feast on!] . Continue reading »
Nov 232008
I’ve blogged on Starbucks before, but just seen their results for y/e Sep08, with sales up $9.4>10.4bn but profits down $1.1>0.5bn. A pity, but what are they doing about it? Continue reading »
Nov 062008
I have just been asked to include a specific extra section on this in the LBS ADP executive course on which I teach, which reminds me it may be useful to many others, so here’s a very short summary Continue reading »
Sep 232008
Good to know that, as in earlier tough times, applications at business schools are running at record rates [+20% on last year in one case I heard of] . Let’s hope – really hope! – they get taught some solid, professional strategic management skills while doing their MBAs, so they don’t repeat the awful errors of some who went before !
