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How to Avoid Three Mistakes CEOs Commonly Make Responding to Economic Crisis

Frequently as CEOs we are forced to respond quickly to an external threat. No doubt, the biggest threat, at the moment, is the effect of the recession on your company. Maybe we could take our time in the past to make measured decisions. Not anymore. The board, shareholders, clients and especially employees are all clamoring for duck and cover action. Protect their jobs. Protect the profits. Keep company value as high as possible. Under this pressure many of us, as CEOs, could easily make a few common mistakes. Let’s avoid the pain and gain the advantage to act quickly by avoiding these three mistakes.

1. “We are not affected.” Or the opposite: “It is a complete rout.”

First, look to see how you really are affected by the recession. Not all companies, industries or areas are affected the same. It is common to have a few business sections actually flourish in recession when so many are in decline.

Your preparation will make a huge difference in the severity of the effect you will suffer. One of the harder hit business sections is hedge funds. Most suffered tremendously for the risks they invested in. One fund, Soros, predicted the recession and prepared its portfolio. Their portfolio is still profitable just smaller.

You could do likewise. It’s not too late. Look objectively at the general economy trends and specifics in your profit chain for effects that could still disrupt your business. Then make appropriate plans. Start acting on your plan though or it may be too late.

Discover the other two critical mistakes responding to a tough business climate. Click Here.

Posted in General Thoughts.

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Quick Look – Next 100 Years, author George Friedman

Want to get ahead of the next wave?  Expand your time horizon.

Mr.  Friedman, who is known as a top geopolitical analyst with his firm StratFor, has taken on the audacity to look ahead 100 years.  American business will see this as very long view, after all, we are a young, hyperactive country.  Other societies will commonly make century long plans.  This book helps us catch up.

The book explores our futures by looking at the global influences developing through population, migration, economic opportunity based on capacity and geographic location, military choices to protect economic trade, political will and many historical cycles.

Looking at 20 year periods, Mr.  Friedman predicts likely, global and regional conflicts, powershifts among continents and countries you would never expect.  He also looks at big technology trends extrapolated for decades and who will hold the advantage.  Think outer space generated power and the influence of the space controlling country (USA).

Global relations of the US with near and long term countries like Russia, China and Mexico are explored.  The surprise is who will have the most influence many decades from now.  Look forward to your next deal with Turkey, Poland, and Japan.  He predicts less glamorous outlooks for China and Russia.  You won’t believe how much Mexico will be part of the long run future of the US.

Of course, you’re thinking that no one could have any accuracy that far out.  You’ll get no argument with George there.  He makes several examples of how common sense doesn’t predict 20 years out.  Just think, in 1960 would anyone have thought that the Soviet Union would be on the way out in 1980s.  Or in 1980 that 20 years later the powerful US would be leading a global force in fighting the defacto government of one of the weakest countries in the world.

Read this book.  Expand your time horizon so you will start to see how you might respond to markets and economy in the coming years.  Discover what boomers will do to the world’s economies, what the next 10-15 years will mean to labor availability, and where you had better put your money.  But, especially read The Next 100 Years to because it is fascinating to see what the world will be like for our children’s children.

Posted in Quick Reviews.

Ten Critical Actions You Can Take Now as CEO to Guide Your Company Through Economic Hard Times

There is no doubt in anyone’s mind that the American economy has turned. Your company may be severely affected or only slightly affected by the economy, however, all companies now must adjust for an environment of difficult credit, worried employees, nervous shareholders, unreliable suppliers and reduced revenues.

We’ve had a very long run of improving economy, expanding business and easy credit. Many CEOs in today’s companies are not aware of the changes required to operate company when the economy is shrinking. Personally, I’ve been through a couple cycles and have had the opportunity to turn around several companies. Operating a company in hard times has many parallels to a turnaround in normal times. Let’s examine a couple of critical steps you can start quickly, as CEO, to assure survival and even a thriving future.

Keep stakeholders informed.

Shareholders, employees, even customers need lots of information. When times are tough, different constituents will be need more information from you regularly.  A few will need to understand the plan, while others need to know that someone is in charge and thinking about everything that can be done to keep their jobs secure, to keep the revenue flowing, or to keep the share value high.

READ the rest of the article to discover all the critical action a CEO must take now.

Posted in General Thoughts.