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October 15, 2008
Exclusive: Betting the Company: Welcome to the World of Crisis Management
Jim Thomas
Welcome to the new world of crisis and crisis management. From now on, it’s going to be a relatively permanent condition, so better get used to it. There is absolutely no doubt that the U.S. economy has been severely shaken, so if your firm is not experiencing an immediate threat to its existence, then simply be patient until it arrives. In any difficult situation there is always opportunity – which doesn’t make you feel much better while living through it! Regardless, you need to learn key survival lessons from what you are about to go through. Firms which anticipated this economic downturn were able to make life-saving preparations – like conserving cash and eliminating debt. They are likely to survive and do well. But then there were those who were surprised, a fatal mistake in both business and war. When your firm winds up struggling to survive (which many are doing even as these words are written) there is exquisite torture in the thought that “It didn’t have to be this way.” Indeed it did not: but what can your company do RIGHT NOW to improve its odds of survival? And where do we start?
Being Scared to Death: And Other Good Beginnings
First a cautionary note: Do not begin by pulling out your old textbooks from MBA School because they didn’t cover this subject. Most MBAs got a full dose of how to organize market research or how to conduct a “due diligence” analysis: but they didn’t tell you how to avoid surprises or how to sense early warnings of changes in the competitive environment. In the 21st century, the most critical business processes – of healing, of survival and of future recovery – begin with a no-nonsense strategy of introspection – called “Looking Deep.”
· Where are we?
· How did we get here? (without looking for scapegoats)
· Where are we most vulnerable?
· What are our strengths?
· What opportunities can we exploit?
· How can we build shared confidence and enthusiasm (leaders, led and stake-holders) to work toward a companywide solution?
· Where do we start? And what will be our new strategy?
· Where are we?
· How did we get here? (without looking for scapegoats)
· Where are we most vulnerable?
· What are our strengths?
· What opportunities can we exploit?
· How can we build shared confidence and enthusiasm (leaders, led and stake-holders) to work toward a companywide solution?
· Where do we start? And what will be our new strategy?
Intelligence: The Newest Old Thing
While relentless introspection is the beginning, the key ingredient in answering all these questions – now a matter of life or death for many companies – is business intelligence. For years, corporate America paid lip service to the value of information and even claimed to have enshrined competitive strategies. In reality, most believed implicitly in marketing, operations research and value of just muddling through, confident that existing corporate strengths would be enough to offset most competitors. Today, however, the balance of power has shifted, the terms of trade have been adjusted and the competitive margin is narrower than ever before. Success and survival depend as well on the disciplined analysis of the competitive environment – and on the business intelligence needed to survive its challenges.
So how does that happen?
We will be returning to this topic in future editions of this column but for now keep the following points in mind:
- Any new business strategy can be no better than the information on which it is based. What landed your company in its present difficulties was either lousy information or a non-existent strategy: so begin by vowing not to make those same mistakes again. The more comprehensive and current your information, the more likely the new strategy is to be successful.
- Firms with a competent Competitive Intelligence Team have an inherent competitive advantage. (That advantage can become decisive when the team reports directly to the CEO). Simply stated: in an Information Age, the raw data on which business intelligence and truly competitive strategies are based are readily available – almost ridiculously so. But what is usually missing is the corporate intent to obtain that data – and a determined ignorance of its vital importance in effective decision-making.
- You may have neither business intelligence nor even a Competitive Intelligence Team: but your competition probably does. Life is indeed good if you are fortunate enough to have stupid competitors. But the problem is that many American businesses have assumed for far too long that the rest of the world was too backward, too slow or too incompetent to give us a run for our money. Still believe those comforting thoughts today? The fact is that the financial collapse of Wall Street is only a symptom of the aggressive challenges now being mounted against the American economy. And believe it or not: many of those challengers owe their positions to the disciplined use of business intelligence.
© 2008 by FamilySecurityMatters.org and Business Battle Lab LLC
FamilySecurityMatters.org Contributing Editor Jim Thomas is a founding partner and COO of Business Battle Lab, LLC (www.businessbattlelab.com), a Texas-based firm helping clients to weather storms, financial and otherwise. Jim has over 35 years of intelligence experience in both the public and private sectors, including key U.S. intelligence agencies.
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