The Upside of the Downturn

10 Management Strategies to Prevail in the Recession and Thrive in the Aftermath

Geoff Colvin

• Publisher: Nicholas Brealey Publishing
• Year: 2011
• Print ISBN:
  9781857885286
• eBook ISBN:
  9781857884357
• Topic: Business
• Subtopic: Management
• Index: Business

Never waste a crisis - the current recession is a turning point into a new economic world, a world full of opportunity for those who understand what's happening, why it's happening, and what it means for them. Some businesses - and some people - will emerge from this downturn stronger and more dominant than when it started. Others will weaken and fade. It all depends on critical choices they make right now. Geoff Colvin, one of world's most respected business journalists, says even the scariest recession has an upside. The best managers know that conventional thinking won't help them win in these tough times. They're taking smart, practical steps that will not only keep them strong, but will also distance them from the pack for years to come. The dozens of top-performing leaders Colvin interviewed reject the common view that slashing costs and firing employees is all that matters. They see the recession as a rich opportunity to restructure, reinvent and reimagine their businesses and lay the groundwork for future growth. Written in Colvin's characteristic reader-friendly style, "The Upside of the Downturn" shows how anyone - from small business owner to global conglomerate CEO - can benefit from his ten solidly grounded strategies. He shows how to find opportunities that will increase your company's competitiveness and build its long-term value. For example: reset priorities. Easy to say, harder to do. Pursuing the lofty goals set in good times can be disastrous now; re-evaluate people and steal some good ones. Mass layoffs are a tempting way to cut costs, but great companies often find smarter alternatives. And if your competitors are unwise enough to fire their best people, grab them; keep investing in the core. Trim the fat from your budgets but not the muscle. The best companies actually increase some spending in a recession, funding the areas that make them unique and valuable; and, price with courage. Many companies assume they must - yet the long-term damage often outweighs the short-term boost. Colvin shows how these strategies really work, using examples of major companies that have applied them with inspiring results and discovered those hidden gems of opportunity and those elusive 'green shoots' of recovery.

Index

AIG

credit default swaps, 64, 139

credit-rating of, 28

Amazon, 103–4

American Express, 119–20

AOL, 97–98, 168

Apple Computer

Fortune ranking, 59

product development, 84

total enterprise value, 90

Armani, Giorgio, 72–73

Armstrong, Lance, 1–2

ASUSTeK Computer, 77

Auto industry

downsizing of, 21, 41

government regulation, 31

trust in, decline, 58–59

value propositions of, 103, 108

Axelrod, Beth, 55

AZ Electronic Materials, 127–28

Bank of America, 5, 7

Basso, Ivan, 2–3

Bear Stearns, 19, 137

Berkshire Hathaway, 59

Bernanke, Ben, 12

Bhasin, Pramod, 129–30

Boards of directors

new tasks of, 33–34

and shareholder power, 69–71

Bock, Wally, 53–54

Bonuses, 49–50

Brands

as asset, 92

counterfeit products, 82–83

Bull market 2002–2007

beginning, events of, 12

global capital, impact of, 13–14

and housing market, 13–15

Burke, James, 151

Bush, George W., 152

Business failures

and acquisitions, 97–98

in recession, 6–7, 19, 29, 104

unimagined scenarios, 139–40

Business models

in economic boom, 166–67

imagination-based, 83–86

Business relationships

government intervention, 63–67

with shareholders, 68–71

trust, lack of, 58–60, 63

Business strategy in downturn, 72–86

versus boom time, 166–67

and core of company, 74–76

and customer behavior, 76–79

and industry changes, 79–86

and threats to brand, 82–83

value propositions, creating, 103–6, 108–9

Capital

access to, assessing, 28–29, 96, 125

in business, determining, 91–92

cash, preserving, 27, 130–31

circulating capital, 91

cost of, 93

in economic boom, 167–68

equity/debt capital, 93

going public, 126–28

managing for cash, 94–95

managing for value, 95–97

market capitalization, 89–90

Carl’s Jr., 106

Cash. See Capital

CEOs

firing in recession, 30

investing in company, 129–30

new tasks of, 33–34

pay regulation, 49, 66, 67 ...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• One The Greatest Opportunity Why this historic downturn is so rich with possibilities
• Two The New Normal The strange story of how we got here and what it means
• Three Reset Priorities The critical first response to a radically new reality
• Four Protect Your Most Valuable Asset It’s your people—yet they’re often valued the least
• Five Engage the Outside World All your relationships are changing—so take control of the process
• Six Reexamine Your Strategy and Business Model The importance of knowing what you must change—and what you must not
• Seven Manage for Value Most companies don’t—an error that can be fatal in this recession
• Eight Create New Solutions for Customers’ New Problems You can do it in more ways than you may realize
• Nine Price with Courage Don’t assume you have to mark down—it’s riskier than you may think
• Ten Get Fitter Faster The right kind of operational discipline pays off powerfully in a recession
• Eleven Understand All Your Risks Seize this moment to take a broader view of what might go wrong in your business
• Twelve Don’t Forget to Grow Yourself Why this downturn is a unique opportunity for self-development
• Thirteen For Next Time Getting ready for the expansion to come—and, yes, for the recession after that
• Index