Business Performance in Crisis:Flat-footed, Ill-prepared and Slow-Reacting
By Dave Livingston, Managing Principal, Llinlithgow Associates
Dave is a management consultant primarily focused on improving enterprise performance by coupling strategy with execution thru the design and implementation of workable, integrated management systems.He blogs on this and related issues in Economics, Markets
& Investments and specific industries and companies at
, his BizzXceleration blog.
Where you can keep current on the state of the Economy, the implications for Markets and read explorations into business performance for Industries and specific companies.
How we cope with the economy of the New Normal will depend on how well businesses adjustto the slow growth, over-capacity and strong worldwide competition. In other words all our well-being depends on how well businesses do in re-thinking and re-engineering themselves.Sadly, the prospects in general aren’t very good, when you survey the landscape. Here weexamine how businesses adapted during the crisis from December, 2008 thru the end of 2009.Because most businesses ignored the warning signs that had been visible since 2006, clearsince 2007 and undeniable in early 2008 they were largely caught flat-footed by the crisis inthe Fall of 2008. Having been blindsided they reacted slowly like deer startled by theheadlights on a dark country road. And, like the deer, with the excuse that nobody could haveseen this coming.Here we survey those reactions across the broad spectrum of general business responses, layout and examine the principles that should have governed their responses and should be theprinciples that guide them going forward and consider the implications for performance, profitand earnings. We also investigate particular companies that did well heading into the crisis byalready having major re-construction projects underway. In particular we take a deep dive inexamining the complete overhaul of Wal-Mart which began major restructuring in 2004,established new strategies and controls and completely re-thought all aspects of its operations.Those include product development, market branding and merchandising, store operationsand logistics and technology as well as its international operations. In other words we takeWMT as an exemplar of the kind of deep-seated re-thinking that every business will need to dobut few are.We also offer up major explorations of how disruptive this decade is going to be and the crisisin leadership that contributed to so many of these problems.