A global recession such as we are all suffering is not easy for anyone. Some companies will not survive since sloppy business practices only work in good times. The half-full glass can thus be seen as a time of opportunity for the survivors who apply high performance practices. On the other side of the recession, the survivors will be in good shape and will have less competition.
That message is to be found in a Business Interview in The Hindu: Hard-edged diagnostic of business is critical in a downturn. The Four Laws in the book, ‘Breakthrough Imperative – How the Best Managers achieve outstanding results’, are fundamental.
- Costs and prices always decline.
- Competitive position determines options.
- Customers and profit pools don’t stand still.
- Simplicity gets results.
Mr Mark A. Gottfredson, a co-author of the book, and a Partner in Bain & Company, Inc., US, affirms that the Four Laws are timeless concepts that work in economic boom times and in times of downturns. A performance improvement diagnostic using the four laws will identify the key imperatives for surviving the downturn and for gaining advantage as the market turns back up.
The Four Laws in a way reflect a view on what is happening around and outside the company. The Balanced Scorecard approach (bsc) suggests that the organization should consider its strategy with respect to four key dimensions, rather than only the Financial dimension. These dimensions are:
- Learning and growth and
- Internal processes
A downturn bsc forces a more holistic view of performance as organizations develop and review their strategic objectives, rather than just adopting a shedding-assets and cutting costs approach. Taking the right corrective actions in line with your recession scorecard means that the organization will be in the best possible shape once the recession passes.
Weaker competitors who do not adopt this downturn scorecard approach will either not survive or will have fallen back in their competitivity. The Chinese curse says, ‘May you live in interesting times’. Provided you take the right steps that curse can signal an opportunity.