Business Success Tenets in the Continuing Economic Uncertainty

The only prevailing trend that businesses and executives can rely upon in the short to intermediate term is that the journey to the “New Norm” will be predictably unpredictable. The tenuous nature of the economy – domestic and global – will be impacted on a day to day basis by aligned and seemingly uncorrelated data; e.g. the Toyota recalls, the election of a Conservative Republican Senator in Massachusetts, Q4 2009 5.9% growth, negative consumer confidence survey in February 2010, the lack of clarity of Federal policy towards jobs and health, and the financial stability of Dubai and Greece. 

Yes, despite the day to day tumult, over some period of time, the economy will on a net basis continue to improve. Notwithstanding the daily variability; the ability for businesses to adapt to the continued certainty of uncertainty and micro-trends that will become the new norm will be the determining factor in the winners. The key success tenets for companies to expeditiously embrace to better their opportunity for success are:

• The single most certainty to embrace is the constant and asymmetrical uncertainty. Seek out the current micro and evolving trends that will shape your business direction and decisions.
• Time [Focus] and adaptability [alignment] are the two greatest sources of sustained competitive advantage.
• Timely adaptability is a function of on the ground – roll up your sleeves, business system knowledge. Determine, evaluate, measure and adjust to your “leading” indicators of success.
• Knowledge is the result of effective governance – aligned organization wide information management and decision making processes.
• Effective governance is the outcome of a capable [competent and passionate] organization.
• Capable organizations are sustained by clarity and alignment of purpose, role, meeting of expectations/needs, and the embracing of core values.

These six tenants are not mutually exclusive of one another. The future strength of a business will be the modeling, interweaving and integration of theses tenants into the fabric your business.

Business Success in the Post Great Recession –New Norm

Businesses, governments and consumers [individuals and families] are continuing to move head on into the transition from the period of “synthetic excess” – living off future cash flows - to that of the New Norm. The journey from point A – “The Great Recession” – to that of point B – “The New Norm” will be variegated and absent of any predictable trajectory. The pontiffs have pronounced that the “recovery” has begun as early as the third quarter of 2009. However, we have already seen downward corrections and reversal of early progress in GDP, new home construction, existing home sales, and unemployment. In mid January the banks have begun in large numbers returning TARP monies, however their fourth quarter earnings were not impressive as loan values and default rates are still unfavorable.

I remain confident that those businesses that get the right things done through this period of disequilibrium in the markets will be those that prevail as the leaders in the New Norm. Unfortunately, many of the assumptions, tenants, bets, and realities upon which strategies, business and financial models, operations, organization competences, and governance processes in place prior to 2008 will not be sufficient for the supermajority of businesses. The hope that hunkering down will help weather the storm will most likely lead to dismal results.

Given the continued uncertainty in the business climate; I suggest the following five actions to begin immediately.

1. Evaluate your financial strength and competitive position: Know your cash position. Develop best and worst case scenarios. Assess your competitive strength/relevance. Can you / will you be best in class – number 1, 2, or 3 – when the economy pulls out of the current downturn? Why? How?
2. Summarize the most important lessons of the last 18-24 months: Successes and failures.
3. List and qualify the top five priorities for the coming months:Priority one always achieve financial plan – top and bottom line targets. Identify when targets will be agreed by management and board
4. Identify top strategic initiates for the year: New product launches, market expansions, service enhancements, acquisitions. Identify when targets will be agreed by management and board
5. Become adaptable. Implement a process for re-assessment and decision making: What is working? What is not working? What is potential? What is missing? RightgradeTM your organization – Be ahead of the curve. Right talent, in the right place, getting the right things done, and for the right reasons.